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The parback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Blue

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The parback 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 abie to recover its initial investment from Project Omega's expected future cash fows. To answer this question, Blue Hamster's Cro has asked that you compute the project's paryback period using the following expected net cash flows and assuming that the cash flows are recerved 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.) The comventional payback period ignores the time value of money, and this concerns Bive Hamster's cro. He has now asked you to compute Omega s discounted payback period, assuming the company has a 8% cost of capital, Compiete the foloning tabie and perform any necessary caiculations. Round the discounted cash flow values to the nearest whole doliar, and the disceunted paypack period to two decimal places. For ful oredit, cemplete the entire table. (Note: If your anwer is negative, be sure to use a minus son in vour answer.) The conventional pavoack, period ignores the time value of money, and this cencerns Blue Hamster's CFO. He has now asked you to compute Omega's escounted puyback period, assuming the compary has a b\% cost of capital. Complete the following table and perform any nocessary calculations. Round the discounted cash flow values to the nearest whole dollar, and the discounted paryback period to two decimal places. For full credit, compiete the entire table. (Note: If your answer is negative, be sure to use a minus sign in your answer) Which version of a project's paytack period should the CrO use whes evaluating Project Omega, oiven its theoretical superisity? The discounted parback perlod The regular parback period One theoretical disadvantage of both payback methods-compared to the net present value method-is that they foit to consider the walue of the cash flows berond the point in time equal to the payback period. How much value in this example does the discounted parback period method fal to recognire due to this theoretical deficiency? $1,864,748$3,241,058$5,032,696

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