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 $2\mathrm{.}50$ years.

Year

Cash Flow

Year $1$ $$275,000$

Year $2$ $$475,000$

Year $3$ $$400,000$

Year $4$ $$475,000$

If the project$$s weighted average cost of capital $($WACC$)$ is $9\%,$ the project$$s NPV $($rounded to the nearest dollar$)$ is:

$$347,467$

$$312,720$

$$364,840$

$$399,587$