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Year 0 Year 1 Year 2 Year 3 Expected cash flow -$6,000,000 $2,400,000 $5,100,000 $2,100,000 Cumulative cash flow Conventional payback period: years The conventional payback

Year 0 Year 1 Year 2 Year 3
Expected cash flow -$6,000,000 $2,400,000 $5,100,000 $2,100,000
Cumulative cash flow
Conventional payback period:

years

The conventional payback period ignores the time value of money, and this concerns Fuzzy Buttons CFO. He has now asked you to compute Betas discounted payback period, assuming the company has a 9% cost of capital.

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