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Year 3 Cash flow Discounted cash flow Cumulative discounted cash flow Discounted payback period Year o $5,000,000 $5,000,000 $5,000,000 1.84 years Year 1 $2,000,000 $1,869.159

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Year 3 Cash flow Discounted cash flow Cumulative discounted cash flow Discounted payback period Year o $5,000,000 $5,000,000 $5,000,000 1.84 years Year 1 $2,000,000 $1,869.159 $3,130 841 Year 2 $4,250,000 $3,712,115 $581.274 $1,750,000 51.428.521 $2,009,795 Which version of a project's payback period should the CFO use when evaluating Project Deita, given its theoretical superiority? The discounted payback period The regular 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? $1,428,521 O $5,140,636 $3,297,680 $2,009,795

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