can you please answer questions a,b,c,and d to follow the format of the pictures above? Thank you.

4. The Sweepstakes Division is considering two expansion plans. Plan A would expand a current product line at a cost of $8,750,000. Expected annual net cash inflows are $1,525,000, with zero residual value at the end of 9 years. Under Plan B, the Sweepstakes Division would begin producing a new product at a cost of $8,250,000. Plan B is expected to generate net cash inflows of $1,050,000 per year for 10 years, the estimated useful life of that product line. Estimated residual value for Plan B is $950,000. The Sweepstakes Division uses straight-line depreciation and requires an annual internal rate of return (IRR) of 10%. a. Compute the payback, the ARR, the NPV, and the profitability index for both plans. b. Compute the estimated IRR of Plan A. Will this meet what the Sweepstakes Division requir? Lay out each year and use Excel formulas to verify/validate the NPV calculations you made in Requirement 4(a) and the actual IRR for the two plans. How does the IRR of each plan compare with the company's required internal rate of return? d. The Sweepstakes Division must rank the plans and make a recommendation to Pokemon's leadership team. Which expansion plan should the Sweepstakes Division recommend? Why? Requirement 4a Payback = Plan A = Plan B: = = Total net cash inflows during operating life of property Plan A = Plan B = Total depreciation during operating life of property Plan A = Plan B: Total net cash inflows during operating life of property Less: Total depreciation during operating life of property Total operating income during operating life Divide by Property's operating life in years Average annual operating income from plan 1 Plan A Plan B Average Amount invested Plan A Plan B 3 ARR Plan Plan B Comp Problem Part 3 Template + General X Cut Paste Font File Home Insert Page Layout Arial -12 - = = === Die Wrap Text 16 Copy BIU. E Merge & Center $ - % Format Painter Clipboard Alignment Number B82 : * fix there will be no sales revenue, no variable expenses but fixed expenses will sti LA BICTEE FFGH1 150 Plan A = Plan B = ARR = Plan A = Plan B:= Time Net Annuity PV Factor PV Factori = % (i = %, n= ) Present Value Inflow Plan A 1- years 0 PV of annuity Initial investment NPV of Plan A - Plan B 1- years PV of annuity PV of residual value Total PV of net cash inflows Initial investment NPV of Plan B 0 Plan Profitability Index 183 184 185 186 Requirement 4b 187 Comp Problem Part 3 Template Insert Page Layout Formulas Data Review View Help Search File Home a & Cut === General Aer Arial 12 - AA BIU.B..A. Wrap Text Merge & Center - Paste - copy Format Painter $ - % Clipboard Font Alignment Number B82 X there will be no sales revenue, no variable expenses but fixed expenses will still incur. A B C D G IK L 184 185 186 Requirement 4b Annuity PV Factor 1 = % na Plan A = Slas co 193 194 195 196 197 Requirement 4c 198 drew Plan B 199 200 Projects: Plan A Useful life (years) Annual Return rate Initial investment 201 202 CODE GRAY 212 NPV 216 218 219 How does the IRR of each plan compare with the company's required rate of return? Comp Problem Part 3 Template 1 Pie BCD G H How does the IRR of each plan compare with the company's required rate of return? Requirement 4d CODE OR 239 240 245 242 2003 2 Como Problem Part 3 Template CHARGE NURSE DESN Esc A F2 F3 FA F5 FG 4. The Sweepstakes Division is considering two expansion plans. Plan A would expand a current product line at a cost of $8,750,000. Expected annual net cash inflows are $1,525,000, with zero residual value at the end of 9 years. Under Plan B, the Sweepstakes Division would begin producing a new product at a cost of $8,250,000. Plan B is expected to generate net cash inflows of $1,050,000 per year for 10 years, the estimated useful life of that product line. Estimated residual value for Plan B is $950,000. The Sweepstakes Division uses straight-line depreciation and requires an annual internal rate of return (IRR) of 10%. a. Compute the payback, the ARR, the NPV, and the profitability index for both plans. b. Compute the estimated IRR of Plan A. Will this meet what the Sweepstakes Division requir? Lay out each year and use Excel formulas to verify/validate the NPV calculations you made in Requirement 4(a) and the actual IRR for the two plans. How does the IRR of each plan compare with the company's required internal rate of return? d. The Sweepstakes Division must rank the plans and make a recommendation to Pokemon's leadership team. Which expansion plan should the Sweepstakes Division recommend? Why? Requirement 4a Payback = Plan A = Plan B: = = Total net cash inflows during operating life of property Plan A = Plan B = Total depreciation during operating life of property Plan A = Plan B: Total net cash inflows during operating life of property Less: Total depreciation during operating life of property Total operating income during operating life Divide by Property's operating life in years Average annual operating income from plan 1 Plan A Plan B Average Amount invested Plan A Plan B 3 ARR Plan Plan B Comp Problem Part 3 Template + General X Cut Paste Font File Home Insert Page Layout Arial -12 - = = === Die Wrap Text 16 Copy BIU. E Merge & Center $ - % Format Painter Clipboard Alignment Number B82 : * fix there will be no sales revenue, no variable expenses but fixed expenses will sti LA BICTEE FFGH1 150 Plan A = Plan B = ARR = Plan A = Plan B:= Time Net Annuity PV Factor PV Factori = % (i = %, n= ) Present Value Inflow Plan A 1- years 0 PV of annuity Initial investment NPV of Plan A - Plan B 1- years PV of annuity PV of residual value Total PV of net cash inflows Initial investment NPV of Plan B 0 Plan Profitability Index 183 184 185 186 Requirement 4b 187 Comp Problem Part 3 Template Insert Page Layout Formulas Data Review View Help Search File Home a & Cut === General Aer Arial 12 - AA BIU.B..A. Wrap Text Merge & Center - Paste - copy Format Painter $ - % Clipboard Font Alignment Number B82 X there will be no sales revenue, no variable expenses but fixed expenses will still incur. A B C D G IK L 184 185 186 Requirement 4b Annuity PV Factor 1 = % na Plan A = Slas co 193 194 195 196 197 Requirement 4c 198 drew Plan B 199 200 Projects: Plan A Useful life (years) Annual Return rate Initial investment 201 202 CODE GRAY 212 NPV 216 218 219 How does the IRR of each plan compare with the company's required rate of return? Comp Problem Part 3 Template 1 Pie BCD G H How does the IRR of each plan compare with the company's required rate of return? Requirement 4d CODE OR 239 240 245 242 2003 2 Como Problem Part 3 Template CHARGE NURSE DESN Esc A F2 F3 FA F5 FG