please answer both questions and label them

6. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Blue Hamster Manufacturing Inc.: Blue Hamster Manufacturing Inc. is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Delta's expected future cash flows. To answer this question, Blue Hamster's CFO has asked that you compute the project's payback period using the following expected net cash flows and assuming that the cash flows are received evenly throughout each year. . Complete the following table and compute the project's conventional payback period. For full credit, complete the entire table. (Note: Round the conventional payback period to two decimal places. If your answer is negative, be sure to use a minus sign in your answer.) Year 1 Year o - $6,000,000 Expected cash flow Cumulative cash flow Conventional payback period: : $2,400,000 $3,600,000 Year 2 $5,100,000 $1,500,000 Year 3 $2,100,000 $3,600,000 $6,000,000 1.71 years The conventional payback period ignores the time value of money, and this concerns Blue Hamster's CFO. He has now asked you to compute Delta's discounted payback period, assuming the company has a 10% cost of capital. Complete the following table and perform any necessary calculations. Round the discounted cash flow values to the nearest whole dollar, and the discounted payback period to two decimal places. For full credit, complete the entire table. (Note: If your answer is negative, be sure to use a minus sign in your answer.) . () Year o Year 1 Year 2 Year 3 $2,100,000 $ Cash flow -$6,000,000 $2,400,000 $5,100,000 Discounted cash flow S Cumulative discounted cash flow Discounted payback period: years Which version of a project's payback period should the CFO use when evaluating Project Delta, given its theoretical superiority? The regular payback period The discounted payback period One theoretical disadvantage of both payback methods--compared to the net present value method-is that they fail to consider the value of the cash flows beyond the point in time equal to the payback period. . How much value in this example does the discounted payback period method fail to recognize due to this theoretical deficiency? O $ O $1,974,455 O $3,759,579 O $1,577,761 O $5,792,637 7. The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 $325,000 Year 2 $450,000 Year 3 $425,000 $475,000 Year 4 If the project's weighted average cost of capital (WACC) is 7%, the project's NPV (rounded to the nearest dollar) is: O $376,729 O $439,517 O $334,870 O $418,588 Which of the following statements indicate a disadvantage of using the regular payback period (not the discounted payback period) for capital budgeting decisions? Check all that apply. The payback period does not take the project's entire life into account. The payback period is calculated using net income instead of cash flows. The payback period does not take the time value of money into account