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Year 0 Year 1 Year 2 Year 3 Cash flow -$6,000,000 $2,400,000 $5,100,000 $2,100,000 Discounted cash flow 24 Cumulative discounted cash flow Discounted payback period:
Year 0 Year 1 Year 2 Year 3 Cash flow -$6,000,000 $2,400,000 $5,100,000 $2,100,000 Discounted cash flow 24 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 superionty? O 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 $6,168,764 O $3,957,217 O $1,714,226 O $2,411,755
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