(Click the icon to view Present Value of $1 table.) Lapos Company operates a chain of sandwich shops (Click the icon to view additional information.) ( (Click the icon to view Present Value of Ordinary Annuity of $1 table.) ( Read the requirements. (Click the icon to view Future Value of $1 table.) ( (Click the icon to view Future Value of Ordinary Annuity of $1 table.) ( 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, X.X.) Amount invested 1 Expected annual net cash inflow Payback Plan A $ 8,410,000 1,500,000 5.6 years Plan B 8,250,000 1.120.000 7.4 years 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 invested ARR Plan A $ 659,000 4,205,000 15.7% Plan B 415,000 4.725,000 8.8% Caclulate the NPV (net present value) of each plan. Begin by calculating the NPV of Plan A. (Complete all answer boxes. Enter a "0" for any zero balances or amounts that do not apply to the plan. Enter any factor amounts to three decimal places, X.XXX. Use parentheses or a minus sign for a negative net present value.) Plan A: Present Annuity PV Factor (i=9%, n=10) PV Factor (i=9%, n=10) Years Value Net Cash Inflow 1500000 o 1 - 10 10 Present value of annuity Present value of residual value Total PV of cash inflows Initial Investment Net present value of Plan A 3 of 3 (3 complete) * Requirements X 1 table.) rdinary Annuity of $1 ta 1. Compute the payback, the ARR, the NPV, and the profitability index of these two plans. 2. What are the strengths and weaknesses of these capital budgeting methods? 3. Which expansion plan should Lapos Company choose? Why? 4. Estimate Plan A's IRR. How does the IRR compare with the company's required rate of return? table.) pinary Annuity of $1 tal Print Done ayback 5.6 years - 4 years * More Info Tor amounts to three decimal place 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 $1,500,000 for 10 years, with zero residual value at the end of 10 years. Under Plan B, Lapos Company would open three larger shops at a cost of $8,250,000 This plan is expected to generate net cash inflows of $1,120,000 per year for 10 years, the estimated useful life of the properties. Estimated residual value for Plan B is $1,200,000. Lapos Company uses straight-line depreciation and requires an annual return of 9%. Print Done 0 Reference f $10 Present Value of $1 Periods $1 ta 1% 0.990 0.980 0.971 0.961 0.951 0.942 0.933 7% 0.935 0.873 0.816 0.763 0.713 0.666 0.665 0.623 0.923 0.351 0.558 0.557 326 0.290 0.263 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 0.811 0.803 0.795 0.788 0.780 2% 3% 0.980 0.971 0.961 0.943 0.942 0.915 0.924 0.888 0.906 0.863 0.888 0.837 0.871 0.813 0.853 | 0.789 0.837 0.766 0.820 | 0.744 0.804 0.722 0.788 0.701 0.773 0.681 0.758 0.661 0.743 0.642 0.728 0.623 0.714 0.605 0.700 0.587 0.570 0.673 | 0.554 0.660 0.538 0.647 | 0.522 0.634 | 0.507 0.622 | 0.492 0.610 | 0.478 0.598 0.464 0.586 0.450 0.574 0.437 0.563 0.424 0.552 0.412 0.453 0.307 0.372 0.228 4% 0.962 0.925 0.889 0.855 0.822 0.790 0.760 0.731 0.703 0.676 0.650 0.625 0.601 0.577 0.555 0.534 0.513 0.494 0.475 0.456 0.439 0.422 0.406 0.390 0.375 0.361 0.347 0.333 0.321 0.308 0.208 0.141 5% 6% 0.952 0.943 0.907 0.890 0.864 0.840 0.823 0.792 0.784 0.747 0.746 0.705 0.711 0.677 0.627 0.6450.592 0.614 0.585 0.527 0.497 0.530 0.469 0.505 0.442 0.481 0.417 0.458 0.394 0.436 0.371 0.416 0.350 0.396 0.331 0.377 0.312 0.359 0.294 0.342 0.278 0.326 0.262 0.310 0.247 | 0.295 0.233 0.281 0.220 0.268 0.207 0.255 0.196 0.243 0.185 0.231 0.174 0.142 0.097 0.087 0.054 0.582 0.544 0.508 0.475 0.444 0.415 0.388 0.362 0.339 0.317 0.296 0.277 0.258 0.242 8% 9% 10% 0.926 0.917 0.909 0.8570.842 0.826 0.794 0.772 0.751 0.735 0.708 0.683 0.681 0.650 0.621 0.630 0.596 0.564 0.583 0.547 0.513 0.540 0.502 0.467 0.500 0.460 0.424 0.463 0.422 0.386 0.429 0.388 0.350 0.397 0.356 0.319 0.368 0.340 0.299 0.315 0.275 0.239 0.292 | 0.252 0.218 0.270 0.231 0.198 0.250 0.212 | 0.180 0.232 0.194 0.164 0.215 0.178 | 0.149 0.1990.1640.135 0.184 0.150 0.123 0.170 0.138 0.112 0.158 0.126 0.102 0.146 0.116 0.092 0.135 0.106 0.084 0.125 0.098 0.076 0.116 0.090 0.069 0.107 0.082 0.063 0.099 0.075 0.057 0.046 0.032 0.022 0.021 0.013 0.009 12% 14% 15% 16% 18% 20% 0.893 0.877 0.870 0.862 0.847 0.833 0.797 0.769 0.756 0.743 0.718 0.694 0.712 0.675 0.658 0.641 0.609 0.579 0.636 0.592 0.572 0.552 0.516 0.482 0.567 0.519 0.497 0.476 0.437 0.402 0.507 0.456 0.432 0.410 0.370 0.335 0.452 0.400 0.376 0.354 0.314 0.279 0.404 0.327 0.305 0.266 0.233 0.361 0.308 0.284 0.263 0.225 0.194 0.322 0.270 0.247 0.227 0.191 0.162 0.287 0.237 0.215 0.195 0.162 0.135 0.257 0.208 0.187 0.168 0.137 0.112 0.229 0.182 0.163 0.145 0.116 0.093 0.205 0.160 0.141 0.125 0.099 0.078 0.183 0.140 0.123 0.108 0.084 0.065 0.163 | 0.123 0.107 0.093 0.071 0.054 0.146 0.108 0.093 0.080 0.060 0.045 | 0.130 0.095 0.081 0.069 0.051 0.038 0.116 0.083 0.070 0.060 0.043 0.031 0.104 0.073 0.061 0.051 0.037 0.026 0.093 0.064 0.053 0.044 0.031 0.022 0.083 0.056 0.046 0.038 0.026 0.018 0.074 0.049 0.040 0.033 0.022 0.015 0.066 0.043 0.035 0.028 0.019 0.013 0.059 0.038 | 0.030 0.024 0.016 0.010 0.053 0.033 0.026 0.021 0.014 0.009 0.047 0.029 | 0.023 0.018 0.0110.007 0.042 0.026 0.0200.0160.010 0.006 0.037 0.022 0.017 | 0.014 0.008 0.005 0.033 0.020 0.015 0.0120.007 0.005 0.004 0.003 0.001 0.001 0.003 0.001 0.001 0.001 plac 0.686 0.220 0.772 0.211 0.197 0.184 0.172 0.161 0.150 0.141 0.131 0.764 0.757 0.749 0.742 0.672 0.608 0.067 0.011 0.034 Print Done CeT A Reference f $1 ta Present Value of Ordinary Annuity of $1 Periods $1 tal 1.942 3.630 3.890 18% 0.847 1.566 2.174 2.690 3.127 3.498 3.812 4.078 4.303 4.494 16% 0.862 1.605 2.246 2.798 3.274 3.685 4.039 4.344 4.607 4.833 5.029 5.197 5.342 5.468 5.575 5.669 5.749 5.818 5.877 5.929 5.938 1% 2% 3% 4% 5% 6% | 7% 8% 9% 10% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 1.970 1.9131.886 1.859 1.8331.808 1.783 1.759 1.736 2.941 2.884 2.829 | 2.775 2.723 2.673 2.624 2.577 | 2.531 2.487 3.902 3.808 3.717 3.546 3.465 3.387 3.312 3.240 3.170 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.791 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 10.368 9.787 9.253 8.760 8.306 7.887 | 7.499 7.139 6.805 6.495 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.103 13.004 12.106 | 11.296 | 10.563 9.899 9.295 8.745 8.244 7.786 7.367 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 | 7.824 15.562 14.292 13.166 12.166 11.274 10.4779.763 9.122 8.544 8.022 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 18.046 16.351 13.590 12.462 11.470 10.594 9.818 9.129 8.514 18.857 17.011 15.415 14.029 12.821 11.764 10.836 10.017 9.292 8.649 19.660 17.658 15.937 14.451 13.163 12.042 11.061 10.201 9.442 8.772 20.456 18.292 16.444 14.857 13.489 12.303 11.272 10.371 9.580 8.883 21.243 18.914 16.936 15.247 13.799 12.550 11.469 10.529 9.707 8.985 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 22.795 20.121 17.877 15.983 14.375 13.003 11.826 11.826 10.810 | 9.929 9.161 23.560 20.707 18.327 16.330 14.643 13.211 11.987 10.935 10.027 9.237 21.281 18.764 16.663 14.898 406 12.137 11.051 10.116 9.307 21.844 19.188 16.984 15.141 13.591 12.278 11.158 10.198 9.370 25.808 22.396 19.600 17.292 15.372 13.765 12.409 11.258 10.274 9.427 32.835 27.355 23.115 19.793 17.159 15.046 13.332 11.925 10.757 9.779 39.196 31.424 25.730 21.482 18.256 15.762 13.801 12.233 10.962 9.915 5.660 12% 14% 15% 0.893 0.877 0.870 1.6901.647 1.626 2.402 2.322 2.283 3.037 2.914 2.855 3.605 3.433 3.352 4.111 3.889 3.784 4.564 4.288 4.160 4.968 4.639 4.487 5.328 4.946 | 4.772 5.650 5.216 5.019 5.453 5.234 6.194 5.421 6.424 5.842 5.583 6.628 6.002 5.724 6.811 6.142 5.847 6.9746.265 5.954 7.120 6.373 6.047 7.250 6.467 6.128 7.366 6.550 6.198 7.469 6.623 | 6.259 7.562 6.687 6.312 7.645 6.743 7.718 6.792 7.784 6.835 7.843 6.873 7.896 6.906 7.943 6.935 7.984 6.961 8.022 6.983 8.055 7.003 6.566 8.244 7.105 6.642 8.304 7.133 6.661 20% 0.833 1.528 | 2.106 2.589 2.991 3.326 3.605 3.837 | 4.031 4.192 4.327 4.439 4.533 4.611 4.675 4.730 4.775 4.812 4.844 4.870 4.891 4.909 4.925 4.937 4.948 4.956 4.964 4.970 4.975 4.979 4.997 4.999 | place 14.877 co 4.656 4.793 4.910 5.008 5.092 5.162 5.222 5.273 5.316 5.353 5.384 5.410 5.432 5.451 5.467 5.480 5.492 5.502 5.510 5.517 5.548 5.554 5.973 6.011 6.044 6.073 6.097 6.118 6.136 6.152 6.166 6.177 anon 0.066 6.233 6.246 Print Print [ Done] Clear All i Reference Annuity of $1 Future Value of $1 Periods | Annuity of $1 ta 4% 1.040 1.082 1.125 1.170 1.217 1.265 1.316 1.369 1.423 1.480 pl 5% 1.050 1.103 | 1.158 1.216 1.276 1.340 1.407 1.477 1.551 1.629 12% 1.120 1.254 1.405 1.574 1.762 ow 1% 2% 1.010 1.020 1.020 | 1.040 1.030 | 1.061 1.041 1.082 1.051 | 1.104 1.062 1.126 1.072 1.149 1.083 1.172 1.094 1.195 1.105 | 1.219 1.116 | 1.243 1.127 | 1.268 1.138 1.294 1.149 1.319 1.161 1.346 1.173 1.373 1.184 1.400 1.196 1.428 1.208 1.457 1.220 1.486 1.232 1.516 ter 3% 1.030 1.061 1.093 1.126 1.159 | 1.194 | 1.230 1.267 1.305 1.344 1.384 1.426 1.469 1.513 1.558 1.605 1.653 1.702 1.754 1.806 1.860 1.916 1.974 2.033 2.094 2.157 2.221 2.288 2.357 2.427 3.262 4.384 1.539 1.601 1.665 1.732 1.801 1.873 1.948 2.026 2. 107 2.191 2.279 6% 7% 8% 1.060 1.070 1.080 1.124 1.145 | 1.166 1.191 1.225 1.260 1.262 1.311 1.360 1.338 1.403 1.469 | 1.419 1.501 1.587 1.504 | 1.606 1.714 1.594 1.7181.851 1.689 1.838 1.999 1.791 1.967 2.159 1.898 2.105 2.332 2.012 2.252 2.518 2.133 2.410 2.720 2.261 2.579 2.937 2.397 2.759 3.172 2.952 3.426 2.693 3.159 3.700 2.854 3.380 3.996 3.026 3.617 4.316 3.207 3.870 4.661 4.141 5.034 4.430 5.437 4.741 5.871 4.049 5.072 6.341 5.427 6.848 4.549 5.807 7.396 6.214 7.988 5.112 6.649 8.627 5.418 7.114 9.317 5.743 7.612 10.06 10.29 14.97 21.72 18.42 29.46 46.90 9% 10% 1.090 1.100 1.1881.210 1.295 1.331 1.4121.464 1.539 | 1.611 1.677 1.772 1.8281.949 1.993 2.144 2.172 2.358 2.367 2.594 2.580 2.853 2.813 3.138 3.066 3.452 3.342 3.798 3.642 4.177 3.970 4.595 4.328 5.054 4.717 5.560 5.142 6.116 5.604 6.109 7.400 6.659 8.140 7.258 8.954 7.911 9.850 10.83 9.399 11.92 10.25 11.17 12.17 13.27 17.45 31.41 74.36 1174 2.540 14% 1.140 1.300 1.482 1.689 1.925 2.195 2.502 2.853 3.252 3.707 4.226 4.818 5.492 6.261 7.138 8.137 9.276 10.58 12.06 13.74 15.67 17.86 20.36 23.21 | 1.974 2.211 2.476 | 2.773 3.106 3.479 3.896 4.363 4.887 5.474 6.130 6.866 7.690 8.613 9.646 10.80 12.10 13.55 15.18 17.00 19.04 15% 1.150 1.323 1.521 1.749 2.011 2.313 2.660 3.059 3.518 4.046 4.652 5.350 6.153 7.076 8.137 9.358 10.76 12.38 14.23 16.37 18.82 21.64 24.89 28.63 ople 1.710 1.796 1.886 1.980 2.079 2.183 2.292 2.407 2.527 2.653 2.786 2.925 3.072 3.225 3.386 3.556 3.733 3.920 4.116 4.322 7.040 11.47 e decimal plac 6.727 10 1.546 2.370 6888 1.577 1.608 4.292 192 8.623 26.46 1.270 1.282 1.295 1.308 1.321 1.335 1.348 1.489 1.645 2.465 2.563 2.666 2.772 2.883 2.999 3.119 3.243 4.801 7.107 1.641 1.673 1.707 1.741 1.776 1.811 2.208 2.692 14.2 26.75 65.21 45.26 93.05 289.0 50.95 188.9 700. 2 267.9 1,084 Print Done Clear All i Reference Annuity of $1 ta Periods Annuity of $1 tab pid 15% 1.000 2.150 3.473 4.993 6.742 8.754 11.07 14% 1.000 2.140 3.440 4.921 6.610 8.536 10.73 13.23 16.09 w 1% 2% 1.000 1.000 2.010 | 2.020 3.030 3.060 4.060 | 4.122 5.101 5.204 6.152 6.308 7.214 7.434 8.286 8.583 9.369 9.755 10.46 10.95 11.57 12.17 12.68 13.41 13.81 14.68 14.95 16.10 17.29 17.26 7.898 12% 1.000 2.120 3.374 4.779 6.353 8.115 10.09 12.30 14.78 17.55 20.65 24.13 28.03 32.39 37.28 23.04 17.89 20.14 o 15.97 27.15 Future Value of Ordinary Annuity of $1 3% 4% 5% 6% 7% 8% 9% 10% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2.030 | 2.040 2.050 2.060 2.070 2.080 | 2.090 2.100 3.091 3.122 3.153 3.184 3.215 3.246 3.278 3.310 4.184 4.246 4.310 4.375 4.440 4.506 4.573 4.641 5.309 5.416 5.526 5.637 5.751 5.867 5.985 6.105 6.468 6.633 6.802 6.975 7.1537.336 7.523 7.716 7.662 8.142 8.394 8.654 8.923 9.2009.487 8.892 9.214 9.549 9.897 | 10.260 10.64 11.03 | 11.44 10.16 10.58 | 11.03 11.49 11.98 12.49 13.02 13.58 11.46 12.01 12.58 13.18 13.82 14.49 15.19 15.94 12.81 13.49 14.21 14.97 15.78 17.56 | 18.53 14.19 15.03 15.92 16.87 21.38 15.62 16.63 18.88 20.14 22.95 | 24.52 17.09 18.29 19.60 21.02 22.55 26.02 27.98 18.60 21.58 23.28 25.13 29.36 31.77 20.16 27.89 21.76 28.21 30.84 23.41 34.00 25.12 27.67 30.54 33.76 37.38 41.45 46.02 51.16 26.87 29.78 33.07 36.79 41.00 45.76 51.16 57.28 28.68 31.97 35.72 39.99 44.87 50.42 56.76 64.00 30.54 34.25 38.51 43.39 49.01 55.46 62.87 71.40 32.45 36.62 41.43 47.00 53.44 60.89 69.53 79.54 34.43 39.08 44.50 50.82 58.18 66.76 76.79 88.50 36.46 41.65 47.73 54.86 63.25 73.11 84.70 98.35 44.31 51.11 59.16 68.68 79.95 93.32 109.2 47.08 54.67 63.71 74.48 87.35 102.7 121.1 49.97 58.40 68.53 80.70 95.34 113.0 1342 45.22 52.97 62.32 73.64 87.35 104.0 124.1 148.6 47.58 56.08 66.44 79.06 94.46 113.3 136.3 164.5 75.40 95.03 120.8 154.8 199.6 259.1 337.9 442.6 112.8 152. 7 209.3 290.3 406.5 573.8 815. 1 1.164 35.95 36.97 48.88 30.91 e decimal place 19.61 20.81 22.02 23.24 24.47 22.84 24.30 25.78 27.30 28.85 30.42 32.03 37.58 43.84 50.98 59.12 68.39 78.97 91.02 104.8 120.4 138.3 158.7 181.9 208.3 238.5 272.9 312.1 356.8 1,342 4,995 55.72 65.08 75.84 88.21 102.4 118.8 137.6 159.3 1842 212.8 245.7 283.6 3271 377.2 434.7 1,779 7,218 28.24 29.53 63.44 72.05 81.70 92.50 104.6 118.2 133.3 150.3 169.4 190.7 214.6 241.3 767.1 2,400 33.67 38.55 40.71 30.82 35.34 37.05 33.45 34.78 48.89 40.57 60.40 34.58 64.46 Print Done Clear All