Calculate the ARR (accounting rate of return) for both plans. (Round your answers to the nearest tenth percent, X.X) ?

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Score: 0.91 of 6 pts 3 of 3 (3 complete) HW Score: 4 P26-31A (similar to) - X i More Info Lados Company operates a chain of sandwich shops (Click the icon to view additional information.) The company is considering two possible expansion plans. Plan A would open eight smaller shops at a cost of $8,410,000 Expected annual net cash inflows are S1525,000 for 10 years, with zero residual value at the end of 10 years Under Plan B, Lados Company would open three larger shops at a cost of $8,250,000. This plan is expected to generate net cash inflows of $1,070,000 per year for 10 years, the estimated useful life of the properties Estimated residual value for Plan B is $990,000 Lados Company uses straight-line depreciation and requires an annual return of 8%. Read the requirements Requirement 1. Compute the payback, the ARR, the NPV, and the profitability index of these two plans Calculate the payback for both plans (Round your answers to one decimal place, XX) Amount invested Expecled annual net cash inflow Print Done Payback 8.410,000 S 65 vears 1,525 000 Plan A 8250,000 7 Nears 1070,000 Plan B - X Requirements Calculate the ARR (accounting rate of return) for both plans (Round your answers to the nearest tenth percent, X X%) Average annual operating income Average amount invesled ARR 1. Compute the payback, the ARR, the NPV, and the profitability index of these Plan A wo pisns 2. What are the strengths and weaknesses of these capital budgeting methods? 3. Which expansion plan should Lados Company choose? Why? 4. Estimate Plan A's IRR. How does the IRR compare with the company's required rate of return? Plan B Print Done Choose from any list or enter any number in the input fields and then click Check Answer 7 parts remaining Clear All Check A