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

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Year 1 Year 2 Year o -$6,000,000 Year 3 $2,400,000 $5,100,000 $2,100,000 Expected cash flow Cumulative cash flow Conventional payback period: years The conventional payback period ignores the time value of money, and this concerns Blue Hamster's CFO, He has now asked you to compute Delta's discounted payback period, assuming the company has a 10% cost of capital. Complete the following table and perform any necessary calculations. Round the discounted cash flow values to the nearest whole dollar, and the discounted payback period to two decimal places. For full credit, complete the entire table. (Note: If your answer is negative, be sure to use a minus sign in your answer.) Year 1 Year 2 Year o -$6,000,000 $2,400,000 Year 3 $2,100,000 $5,100,000 Cash flow Discounted cash flow Cumulative discounted cash flow Discounted payback period: S years Which version of a project's payback period should the CFO use when evaluating Project Delta, given its theoretical superiority? The discounted payback period The regular payback period

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