Payback period essentially provides the number of years it would take for a project to recover the initial investment from its operating cash flows. As the ranking criteria but they provided important information about liquidity and risk. The the payback, other things constant, the greater the project's liquidity. Suppose Extensive Enterprises's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost; however, she does know that the project's regular payback period is 2.5 years. If the project's weighted average cost of capital (WACC) is 8%, what is its NPV? $315,361 $371,013 $426,665 $389,564 The discounted payback period does not take the time value of money into account. The discounted payback period does not take the project's entire life into account. The discounted payback period is calculated using net income instead of cash flows