(Click the icon to view Present Value of (Click the icon to view Future Value of * Requirements X of he pl ne de 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 Hill Company choose? Why? 4. Estimate Plan A's IRR. How does the IRR compare with the company's required rate of return? Print Done and then click Check Answer Clear All (Click the icon to view Present Value (Click the icon to view Present Value click the lantai Siura Vlho More Info P del The company is considering two possible expansion plans. Plan A would open eight smaller shops at a cost of $8,700,000. Expected annual net cash inflows are $1,550,000 for 10 years, with zero residual value at the end of 10 years. Under Plan B, Hill Company would open three larger shops at a cost of $8,340,000. This plan is expected to generate net cash inflows of $990,000 per year for 10 years, the estimated useful life of the properties. Estimated residual value for Plan B is $1,200,000. Hill Company uses straight-line depreciation and requires an annual return of 10%. Print Done then click Check Answer Reference Periods 2% 1 0980 0.951 2 3 4 5 0.990 0.980 0.971 0.961 0.951 3% 0.971 0.943 0.915 0.888 0.863 4% 0.952 0.925 0.889 0.855 0.822 0.942 0.924 0.906 5% 0.952 0.907 0.864 0.823 0.784 6% 0.943 0 890 0.840 0.792 0.747 10% 0.909 0.826 0751 0/683 0.621 12% 0.893 0.797 0.712 0.636 0.567 14% 0877 0.769 0.675 0592 0.519 15% 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 16% 0.862 0.743 0.641 0.552 0.476 18% 0.847 0.718 0.609 0.516 0.437 20% 0.833 0.694 0.579 0.482 0.402 0.790 6 7 8 9 10 0.942 0.933 0.923 0.914 0.905 0.888 0.871 0.853 0.837 0.820 0.837 0.813 0.789 0.766 0.744 0.760 0.731 0.703 0.676 0.746 0.711 0.677 0.645 0.614 Present Value of $1 7% 8% 9% 0.935 0926 0.917 0.873 0.857 0.842 0816 0.794 0.772 0.763 0.735 0.708 0.713 0.681 0.650 0.666 0.630 0.596 0.623 0.583 0.547 0.582 0.540 0.502 0.544 0.500 0.460 0.508 0.463 0.422 0.475 0.429 0.388 0444 0.397 0.356 0.415 0.368 0.326 0.388 0.340 0 299 0.362 0.315 0.275 0339 0.292 0.252 0.317 0.270 0 231 0.705 0.665 0.627 0.592 0558 0.564 0.513 0.467 0.424 0.386 0.410 0.354 0.305 0.263 0.227 0.370 0.314 0.266 0.225 0.191 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.456 0.400 0.351 0.308 0270 0.237 0 208 0.182 0.160 0.140 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.066 11 12 13 14 15 0.896 0.887 0.879 0.870 0.861 0.804 0.788 0.773 0.758 0.743 0.728 0714 0.722 0.701 0.681 0.661 0.642 0.623 0.605 0.650 0.625 0.601 0.577 0.555 0534 0.513 0.585 0.557 0.530 0 505 0.481 0.527 0.497 0.469 0.442 0.417 0.350 0319 0290 0.263 0.239 0.215 0.187 0.163 0.141 0.123 0.195 0.168 0.145 0.125 0.108 0.162 0 137 0.116 0.099 0.084 16 17 0.853 0.844 0.458 0.436 0394 0.371 0.218 0.198 0.163 0.146 0.123 0.108 0.107 0.093 0.093 0.080 0.071 0.054 0.060 0.045 Print Done 24 of 25 (20 complete) Reference 14 15 0758 0743 0661 0642 05 0555 0505 0481 0442 0417 03 0362 0:40 0315 0299 0275 0160 0.140 0.141 0.123 0.099 0.084 0.07 0.065 16 18 19 20 0870 0.881 0853 0844 0.836 0828 0820 0729 0714 1 TCO 0686 063 0623 0605 0587 0570 0554 0534 0511 0.494 0475 0.456 0.458 0.436 0416 0396 37 0.394 0371 0350 0331 0.312 0.339 0317 0296 0277 0258 0.292 0270 0260 0232 0215 0262 0231 0212 0.194 0 178 0263 0239 0218 0198 0 180 0.164 0 149 0205 0.183 0.163 0 146 0 130 0 116 0 104 0 123 0.108 0.096 0.083 003 0.107 0.093 0.01 0070 0.06 016 0.108 093 0000 0.059 0060 0051 007 0.060 0.051 0.043 037 0054 0.045 0.038 0.031 0026 21 22 23 24 25 0311 0803 0795 0788 070 0660 047 0534 1.62 0.610 0528 0522 0.507 0.492 0478 0.439 0422 0406 0390 0375 0359 0342 0.326 0.310 0 295 0294 0.278 0262 0247 0233 0242 0226 0.211 0.197 0.184 0.199 0 184 0 TO 0.158 046 0.1M 0.150 Q138 0126 10.116 0 135 0.123 0.112 102 0092 0.093 0.3 0.074 006 0059 0.053 0046 0040 0035 0030 0044 0038 .033 a028 0024 0.031 0026 0022 0019 2016 0022 0018 0.015 0.013 01010 0064 0 066 0.049 0043 0038 0033 0.029 0.026 0022 0020 26 27 20 2 0.772 0.764 0.757 0749 0742 0672 Cece 0596 0666 474 0563 1562 0464 0450 0437 0424 0412 0361 0347 13 0321 0.306 0.285 0268 0 255 0243 023 220 0207 @ 196 0 185 2174 072 0.161 150 011 (131 036 1126 11 0107 0096 0 106 a03 009 0032 0275 0024 0076 009 0065 0057 0.053 0047 a042 0037 0033 0026 0023 0020 0017 0015 002] 0018 0016 0.014 0012 0014 0.01 0010 2008 2007 0.009 a097 0.005 0.005 a.COM _ ( 142 097 0.453 0067 0206 0045 0 004 0 052 0.003 0022 0001 0001 0.307 0228 2011 003 0005 0 001 50 9.37 01 003" 054 034 0 0 1 DDD 01 1009 0001 Print Done Periods 1 2 3 4 5 12% 0.893 1.690 2402 3.037 3.605 14% 0.877 1.647 2322 2914 3.433 3.889 4.288 4.639 4946 5.216 15% 0.870 1.626 2283 2.855 3.352 3.784 4.160 4.487 4.772 5.019 16% 0862 1.606 2246 2798 3274 18% 0.847 1.566 2.174 2.690 3.127 20% 0.833 1.528 2.106 2589 2.991 Present Value of Ordinary Annuity of $1 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 0917 0.909 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 2941 2884 2.829 2.775 2723 2.673 2.624 2577 2531 2487 3.902 3808 3.717 3.630 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 3.890 3.791 5.795 5.601 5.242 5.076 4.917 4.767 4.623 4486 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 6210 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 8.851 8.313 7.824 9.763 15.562 14 292 13.166 12. 166 11 274 10.477 9.122 8.544 8.022 5.417 6 7 8 9 10 4 111 4.564 4.968 5.328 5.650 3.685 4.039 4.344 4.607 4.833 3.498 3.812 4078 4303 4.494 3.326 3.605 3.837 4,031 4.192 11 12 13 14 15 5.938 6.194 6.424 6.628 6.811 5.453 5.660 5.842 6.002 6.142 5.234 5.421 5583 5.724 5.847 5.029 5.197 5.342 5.468 5.575 5.669 5.749 4.656 4.793 4.910 5.008 5.092 4327 4.439 4.533 4.611 4.675 9.447 16 17 6.974 7.120 6.265 6.373 5.954 6.047 5.162 5.222 4.730 4.775 Print Done cl Reference X 14 15 5.T24 5 BAT 5.4BB 555 500 5 DS2 1511 4.675 16 17 18 19 20 GO 6 142 6 265 633 6.47 6 550 6.623 5.954 GCHAT 6128 6. 198 6259 5669 5749 5818 58T 5929 5162 522 523 5316 5353 4.TAO 4_T5 4812 4.844 4370 21 22 23 24 25 13.COM 2 106 11 296 | 10 568 99 925 2745 244 TT96 T.35 6.628 13 86 12 11 98 11.118 10 309712 9 108 59 8061 TED 6811 M.14.58] 12 561 11 6208 0.106 9.447 81 313 T 24 6974 15 56214 2923.161216112740 49.763 922 8544 2022 7120 16 398 14992 13 74 28 11.690 10 828 0 0919372 8.T56 201 7260 17 26 5.68 | 4324 13.1342065 11 180 35 960M 50 236 7.36 18 CMS 16.35] 4 87 13 690 2462 11.470 |108981 9129 8514 7469 18 857 17 01 15.415 | 14.029 | 2 21 | 11.70 836 0.079292 649 7552 19660 | 17 66 | 15 937 | 14 4513 16 | 202 1.61 10 201942 8772 7645 20 465 | 18 292 16 44 - 513489 2 300 112720371 9580 8883 TT18 21 243 | 18914 | 16 936 | 15 247 13.799 | 2 580 | 1499 | 9529 | 2707 8. 925 7794 2023 9.523 | 17413 | 15622 | 14.094 |2 783 | 11.654 | 14675 19823 907 7943 22795 | 20121 | 17 BY 15 963 | 14.375 | 13 003 | 11.826 | 10 81019929 9161 7696 23.560 | 201707 | 327 16.330 | 14.643 13.211 | 1987 | 10 935 0 027 | 9237 7042 24.316 21 281 | 18 764 | 16 663 | 92 |3 406 |2 137 | 17 061| 10 116 19307 7994 5 066 21 344 19 18 | 6 934 15.141 13 591 12 27 | 11.158 | 10 1989370 & 022 Q055 25 302 | 2 396 19.600 | 17292 | 15.372 13765 | 12 409 | 11 258 | 10 274 | 9427 3244 32 435 27 355 | 23.118 |9793 | 17 18 | 15 046 | 3332 | 11 925 | 10 7579779 1% 31 424 | 25 30 21 482 12 266 15.762 13 01 | 12 233 | 10 96219915 , 6.743 6.792 6 835 683 4 291 499 4925 193 4948 26 27 26 29 30 6312 5973 6.369 6011 6.399 16.044 6.434 6073 6.464 6.097 6491 6.118 6.574 6.135 6534 6.152 6551 6.166 656661 6642 6733 5.384 5410 5432 5451 5 467 5.430 5.492 5.502 5510 5517 6906 6935 6.96] 8900 2003 4956 4964 4970 4975 4979 40 716 4997 50 5548 5554 304 6 661 6.246 4999 Print Done Reference hops son.) Future Value of $1 Periods 1 1% 1.010 1.020 1.030 1.041 1.051 2 3 4 5 2% 1.020 1.040 1.061 1.082 1.104 3% 1.030 1.061 1.093 1.126 1.159 4% 1.040 1.082 1.125 1.170 1.217 5% 1.050 1.103 1.158 1.216 1276 6% 1.060 1.124 1.191 1.262 1.338 7% 1.070 1.145 1.225 1.311 1.403 8% 1.080 1.166 1.260 1.360 1.469 9% 1.090 1.188 1.295 1.412 1.539 10% 1.100 1.210 1.331 1.464 1.611 12% 1.120 1.254 1.405 1.574 1.762 14% 1.140 1.300 1.482 1.689 1.925 15% 1.150 1.323 1.521 1.749 2.011 ER, the our & 6 7 8 9 10 1.062 1.072 1.083 1.094 1.105 1.126 1.149 1.172 1.195 1.219 1.194 1.230 1.267 1.305 1.344 1.265 1.316 1.369 1.423 1.480 1.340 1.407 1.477 1.551 1.629 1.419 1.504 1.594 1.689 1.791 1.501 1.606 1.718 1.838 1.967 1.587 1.714 1.851 1.999 2.159 1.677 1.828 1.993 2172 2.367 1.772 1.949 2.144 2.358 2594 1.974 2211 2476 2.773 3.106 2.195 2502 2.853 3.252 3.707 2313 2660 3.059 3.518 4.046 11 12 13 14 15 1.116 1.127 1.138 1.149 1.161 1.243 1.268 1.294 1.319 1.346 1.384 1.426 1.469 1513 1.558 1.539 1.601 1.665 1.732 1.801 1.710 1.796 1.886 1.980 2079 1.898 2012 2133 2 261 2397 2.105 2 252 2410 2.579 2.759 2332 2.518 2.720 2.937 3.172 2.580 2.813 3.066 3.342 3.642 2.853 3.138 3.452 3.798 4.177 3.479 3.896 4.363 4.887 5.474 4.226 4.818 5.492 6.261 7.138 4.652 5 350 6.153 7.076 8.137 2540 16 17 1.173 1.184 1.373 1.400 1.605 1.653 1.873 1.948 2.183 2.292 2.952 3.159 3.426 3.700 3.970 4328 4.595 5.054 6.130 6.866 8.137 9.276 9.358 10.76 2.693 he Print Done Reference ps - X 14 15 1.149 1.161 1.319 1.346 1,513 1.558 1.732 1.801 2261 1.980 2.079 2397 2.579 2.759 2937 3.172 3.342 3642 3.798 4.177 4.887 5.474 6.261 7.138 16 17 18 19 20 1.173 1.184 1.196 1.208 1220 1.373 1.400 1.428 1.457 1.486 1.605 1.653 1.702 1.754 1.806 1.873 1.948 2.026 2.107 2.191 2.183 2.292 2407 2527 2653 2 540 2693 2854 3.026 3 207 2.952 3.159 3.380 3.617 3.870 3.426 3.700 3.996 4.316 4.661 3.970 4.328 4.717 5.142 5.604 4.595 5.054 5.560 6.116 6.727 6.130 6.866 7.690 8,613 9.646 8.137 9 276 10.58 12.06 13.74 7,076 8.137 9.358 10.76 12.38 14.23 16.37 2. th ura 21 22 23 24 25 1.232 1.245 1.257 1.270 1.282 1.516 1.546 1.577 1.608 1.641 1.860 1.916 1.974 2.033 2094 2.279 2.370 2.465 2563 2 666 3.400 3.604 3.820 4049 4 292 4.141 4.430 4.741 5.072 5.427 5.034 5.437 5.871 6.341 6.848 6.109 6.659 7 258 7.911 8.623 7.400 8.140 8.954 9.850 10.83 10.80 12.10 13.55 15.18 17.00 15.67 17 86 20.36 23.21 26.46 18.82 21.64 24.89 28.63 32.92 2.786 2.925 3.072 3.225 3.386 3.556 3.733 3.920 4.116 4.322 26 27 28 29 30 1.295 1,308 1.321 1.335 1.348 1.673 1.707 1.741 1.776 1.811 2.157 2.221 2.288 2.357 2.427 2.772 2.883 2.999 3.119 3.243 4.549 4.822 5.112 5.418 5.743 5.807 6.214 6.649 7.114 7.612 7.396 7988 8.627 9.317 10.06 9.399 10.25 11.17 12.17 13.27 11.92 13.11 14.42 15.86 17.45 19.04 21.32 23.88 26.75 29.96 30.17 34 39 39,20 44.69 50.95 37.86 43.54 50.07 57.58 66.21 40 1489 2 208 3.262 4.801 7.040 10.29 14.97 21.72 31.41 45.26 93.05 188.9 267.9 50 1.645 2 692 4.384 7.107 11.47 18.42 29.46 46.90 74.36 117.4 289.0 7002 1,084 Print Done Reference Periods 1 2 3 4 1% 1.000 2010 3.030 4.060 5.101 2% 1.000 2020 3.060 4.122 5.204 3% 1.000 2030 3.091 4.184 5.309 th 5 TE 6 7 8 9 10 6.152 7.214 8.286 9.369 10.46 6.308 7.434 8.583 9.755 10.95 6.468 7.662 8.892 10.16 11.46 Future Value of Ordinary Annuity of $1 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2040 2050 2.060 2070 2.080 2.090 2.100 2 120 2.140 2150 3.122 3.153 3.184 3.215 3.246 3.278 3.310 3.374 3.440 3.473 4 246 4310 4.375 4.440 4 506 4573 4.641 4.779 4.921 4.993 5.416 5.526 5.637 5.751 5.867 5.985 6.105 6.353 6.610 6.742 6.633 6.802 6.975 7.153 7.336 7.523 7.716 8. 115 8.536 8.754 7.898 8.142 8.394 8.654 8.923 9.200 9.487 10.09 10.73 11.07 9.214 9.549 9.897 10.260 10.64 11.03 11.44 12.30 13.23 13.73 10 58 11.03 11.49 11.98 12.49 13.02 13.58 14.78 16.09 16.79 12.01 12 58 13.18 13.82 14 49 15.19 15.94 17 55 19.34 20.30 13 49 14 21 1497 15.78 16 65 17 56 18.53 20.65 23.04 24.35 15.03 15.92 16.87 17.89 18.98 20.14 2138 24 13 27 27 29.00 16.63 17.71 18.88 20.14 21.50 22.95 24 52 28.03 32.09 34 36 18:29 19.60 21.02 22 55 24 21 26.02 2798 32.39 37 58 40.50 20.02 21 58 2328 25.13 27 15 29.36 31.77 37 28 43.84 47 58 21.82 23.66 25.67 27.89 30.32 33.00 35.95 42.75 50.98 55.72 23.70 25.84 28.21 30.84 33.75 36.97 40.54 48.88 59.12 65 08 11 12 13 14 15 11,57 12.68 13.81 14.96 16 10 17.26 18.43 12.17 13.41 14.68 15.97 17.29 12.81 14.19 15.62 17.09 18.60 16 17 18 64 20.01 2016 21 76 the Print Done 14 15 14.95 16.10 15.97 7.29 17.09 18.60 18.29 20.02 19.60 21.58 21.02 23.28 2.55 25 13 24.21 27.15 26.02 29.36 7.98 31.77 32.39 37 28 37.58 43.84 40.50 47.58 16 17 18 19 20 726 18.43 19.61 20.81 2202 18.64 2001 21.41 22.84 24.30 20.16 21.76 2341 25.12 26.87 21.82 23.70 25.65 27.67 29.78 23.66 25.84 28.13 30.54 33.07 25.67 28.21 30.91 33.76 36.79 27.89 30.84 34.00 37.38 41.00 30.32 38.75 37.45 41.45 45.76 33.00 36.97 41.30 16.02 5116 35.95 40.54 45.60 5116 57 23 42.75 48.88 55.75 8.44 72.05 50.98 59.12 68 39 8.97 102 55.72 6.08 5.84 8 21 02.4 21 22 23 24 25 23.24 24.47 25.72 26.97 28 24 25.78 2730 28 85 30 42 32.03 31.97 34 25 36.62 3008 4165 35.72 38.51 41.43 1. 50 4773 39.99 46.39 4700 50.62 54.86 A.87 901 53 44 58.13 5325 50 42 55.46 60.39 66.76 3. 11 56.76 62 87 69 55 76.79 34.70 64.00 144 195/ 28.50 25 81.70 2.50 145 182 13.. 048 204 138.3 1587 1819 18.8 1376 593 1842 2128 28 68 30.54 32 45 34.43 36 46 38 55 0 4205 A5 22 758 6 32 26 27 22 29 30 Te: 28.53 30 22 32.13 3.45 34.78 33 67 35 34 705 879 4057 44.3 478 1997 51.11 54.67 58 40 62 32 66 4G 58 16 52.71 36 56 C4 9 06 38.68 TAA2 200 3735 4. 46 1996 72 95 3735 5 1040 13.3 1182 1211 1342 1436 16.5 10 1241 136 3 1503 1694 190 246 2013 208. 285 2729 3121 3558 2457 2836 3271 37.2 -3. 5297 56 at 125 1.42 671 1779 266 1202 1543 6.00 175 40 - 46 28 3379 615 150 46 $4.56 2420 495 7218 116 538 4065 290 1527 202 112.2 54 45