Say QAN is considering an upgrade of their premium economy cabins that will require an initial investment of $28,000 now, but that is expected to generate free cash flows of $8,700, $9,500 and $14,800 over the next three years. Assume an appropriate discount rate for QAN is 5.6%.

(a) Calculate the discounted payback period (DPBP) for this project. If QAN management require a payback period of two years, should QAN accept or reject the project? Explain your answer.

(b) State one advantage and one disadvantage of the DPBP method you used in Part (a).