Plss show complete steps thanks. All parts it is one question only or I'll dislike. I will like for complete ans. With formula Cute Camel Woodcraft Company is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Sigma'sexpected future cash flows. To answer this question, Cute Camel's CFO has asked that you compute the project's payback period using the following expected net cash flows andassuming that the cash flows are received evenly throughout each year.Complete the following table and compute the project's conventional payback period. For full credit, complete the entire table. (Note: Round the conventional payback period tothe nearest two decimal places. If your answer is negative use a minus sign.)Year 0Year 1Year 2Year 3Expectedcash flowCumulativecash flowConventionalpaybackperiod:Cash flowDiscountedcash flow$Cumulativediscounted $cash flowDiscountedpaybackperiod-$5,000,000$YearsThe conventional payback period ignores the time value of money, and this concerns Cute Camel's CFO. He has now asked you to compute Sigma's discounted payback period,assuming the company has a 9% cost of capital. Complete the following table and perform any necessary calculations. Round the discounted cash flow values to the nearestwhole dollar, and the discounted payback period to the nearest two decimal places. For full credit, complete the entire table. (Note: If your answer is negative use a minus sign.)Year 0Year 1Year 3Year 2$4,250,000-$5,000,000$1,750,000Years$2,000,000 $4,250,000 $1,750,000$$$2,000,000$$$$$$$Which version of a project's payback period should the CFO use when evaluating Project Sigma, given its theoretical superiority?A. The discounted payback periodB. The regular payback periodHow much value does the discounted payback period method fail to recognize due to this theoretical deficiency?A. $4,928,461B. $3,186,183C. $1,351,321D. $1,763,323

Payback period (PBP) refers to the period or duration within which the company is able to recover…

Cute Camel Woodcraft Company is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Sigma's expected future cash flows. To answer this question, Cute Camel's CFO has asked that you compute the project's payback period using the following expected net cash flows and assuming that the cash flows are received evenly throughout each year. Complete the following table and compute the project's conventional payback period. For full credit, complete the entire table. (Note: Round the conventional payback period to the nearest two decimal places. If your answer is negative use a minus sign.) Year O Year 1 Year 2 Year 3 Expected cash flow Cumulative cash flow Conventional payback period: Cash flow Discounted cash flow Discounted payback period -$5,000,000 $ Cumulative discounted $ cash flow $ Years -$5,000,000 The conventional payback period ignores the time value of money, and this concerns Cute Camel's CFO. He has now asked you to compute Sigma's discounted payback period, assuming the company has a 9% 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 the nearest two decimal places. For full credit, complete the entire table. (Note: If your answer is negative use a minus sign.) Year O Year 3 Year 1 $2,000,000 Year 2 $4,250,000 $1,750,000 Years $ $2,000,000 $4,250,000 $1,750,000 $ S $ $ S $ $ S Which version of a project's payback period should the CFO use when evaluating Project Sigma, given its theoretical superiority? A. The discounted payback period B. The regular payback period How much value does the discounted payback period method fail to recognize due to this theoretical deficiency? A. $4,928,461 B. $3,186,183 C. $1,351,321 D. $1,763,323

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 28P