(Payback period and NPV calculations) Plato Energy is an oil and gas exploration and development oompany localed in Farmington, New Mexico. The compony drills shallow woils in hopes of finding significant oil and gas deposits. The firm is considering two different drilling opportunities that have very diflerent production potentials. The first is in the Barned Shale region of central Texas and the other is in the Gulf Coast. The Barnett Shale project requires a much larger initial investment but provides cash fows (if successful) over a mwch longer period of time than the Gulf Coast opportunity. In addition, the longer life of the Barnett Shale project also results in additional expenditures in year 3 of the project to enhance production throughout the project's to-year expected life. This expenditure involves pumping either water or CO2 down into the wels in order to increase the flow of ol and gas from the structure. The expected cash flows for the two projects are as follows: a. What is the payback period for each of the two projects? b. Based on the payback periods, which of the two projects appears to be the best alternative? What are the limitations of the payback period ranking? That is, what does the payback period not consider that is important in determining the value creation potential of these fwo projects? c. If Plato's management uses a discount rate of 18.1 percent to evaluate the present values of its energy linvestment projects, what is the NPY of the two proposed investments? d. What is your estimate of the value that will be created for Plato by the acceptance of each of these two investments? a. Given the cash flow information in the table, the payoack period of the Bamett Shale project is years. (Round to two decimal places.) Data table