3. Cris boraer, majority stockholder and president of Sudiy Soap Co, is workine with her top managers on future 4 plans for Bhe company. As the company's managerial accountant, yov've been alked to analye the following. 5 situations and make recommendations to the management team. 7. 4. Divtion D is conuldering two posuble expansion plans. Plan A would espand a curent product line at a cost of 1. 58.600,000. Expected annual net cash intlows are $1,525,000, whth tero residual value at the end of 10 vean. 9 Under Plan B, Division O wovld begin producine a new product at a cost of 58,000,000. Tis plan is expected to 10 cenerate net cash imflows of $1,100,000 per vear for 10 years, the entimated cseful bfe of the product line. 11 Estimated residual value for Plan B is $980,000. Division D user straigh line depreciation and requires an annal 12 rethith of sons Sb Compute the estimated IRR of Pian A. IRR Between and 14 a. Compuse the payack, the ARR, the NPV, and the profitablity index for both plans. is b. Compute the estimated IRR of Plan A. 17 the lak of each blan combare with the comparris reouired rate of return? 18. Division D must rank the plans and make a recommendation to Sudiy Soap's top manogement team for the bett plan. Which expardion dan should Didion b thooue? Why? 3. Cris boraer, majority stockholder and president of Sudiy Soap Co, is workine with her top managers on future 4 plans for Bhe company. As the company's managerial accountant, yov've been alked to analye the following. 5 situations and make recommendations to the management team. 7. 4. Divtion D is conuldering two posuble expansion plans. Plan A would espand a curent product line at a cost of 1. 58.600,000. Expected annual net cash intlows are $1,525,000, whth tero residual value at the end of 10 vean. 9 Under Plan B, Division O wovld begin producine a new product at a cost of 58,000,000. Tis plan is expected to 10 cenerate net cash imflows of $1,100,000 per vear for 10 years, the entimated cseful bfe of the product line. 11 Estimated residual value for Plan B is $980,000. Division D user straigh line depreciation and requires an annal 12 rethith of sons Sb Compute the estimated IRR of Pian A. IRR Between and 14 a. Compuse the payack, the ARR, the NPV, and the profitablity index for both plans. is b. Compute the estimated IRR of Plan A. 17 the lak of each blan combare with the comparris reouired rate of return? 18. Division D must rank the plans and make a recommendation to Sudiy Soap's top manogement team for the bett plan. Which expardion dan should Didion b thooue? Why