Cuppen operes a chain of lunch. The company is considering til Poder hope of 58540.000 Eur 5.000 the end of ten years. Under Pas Cuppa would contrar shops of cost of 10.000. The plan is to generate how 100.000 per years, the properties. Estimated walls 31.100.000 Oppiaine dependem Catalon to view the runway de ore ( www the threauty 20% Present Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 Period 2 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.6901.647 1.605 1.566 1.528 Period 3 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 2.322 2.246 2.174 2106 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2.798 2.690 2.589 Period 5 4.853 4.713 4.580 4.452 4.329 4.2123.993 3.791 3.605 3.433 3.274 3.127 2.991 Period 6 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 3.889 3.685 3.498 3.326 Period 7 6.728 6.472 6.230 6.002 5.786 5.5825.206 4.868 4.564 4.288 4.039 3.812 3.605 Period 8 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 4.639 4.344 4.078 3.837 Period 9 8.566 8.162 7.786 7.435 7.108 6.802 6.247 5.759 5.328 4.946 4.607 4,303 4.031 Period 10 9.471 8.983 8.530 8.1117.722 7.360 6.710 6.145 5.6505.216 4.833 4.494 4.192 Period 11 10.368 9.787 9.253 8.760 8.306 7.887 7.139 6.495 5.938 5.453 5.029 4.656 4.327 Period 12 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.8146.194 5.660 5.197 4.793 4.439 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 6.424 5.842 5.342 4.910 4.533 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 6.628 6,002 5.468 5.008 4.611 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.6066.811 6.142 5.575 5.092 4.675 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.5147.4696.623 5.9295.353 4.870 Period 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 6.873 6.097 5.467 4.948 Period 30 25.808 22.396 19.600 17.292 15.372 13.765 11.2589.4278.055 | 7.003 6.177 5.517 4.979 Period 40 32 835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 | 8.244 7.105 6.233 5.548 4.997 Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Future Value of Annuity of $1 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2010 2.020 2.030 2040 2.050 2.060 2.080 2.100 2.120 2.140 2.160 2.180 2.200 3.030 3.060 3.091 3.122 3.153 3.184 3.246 3.310 3.374 3.440 3.506 3.572 3.640 4.060 4.122 4.184 4.246 4.310 4.375 4.506 4.641 4.779 4921 5.066 5.215 5.368 5.101 5.204 5.309 5.416 5.526 5.637 5.867 6.105 6.353 6.610 6.877 7.154 7.442 6.152 6,308 6.468 6.633 6.802 6.975 7.336 7.716 8.115 8.536 8.977 9.442 9.930 7.214 7.434 7.662 7.898 8.142 8.394 8.923 9.487 10.089 10.730 11.414 12.142 12916 8.286 8.583 8.892 9.214 9.549 9.897 10.637 11.436 12.300 13.233 14240 15.327 16.499 9.369 9.755 10.159 10.583 11.027 11.491 12.488 13.579 14.776 16.085 17519 19.086 20.799 10.462 10.950 11.464 12.006 12.578 13.1811448715.937 17.549 19.337 21.321 23.521 25.959 11.567 12.169 12.808 13.486 14.207 14.972 16.645 18.531 20.655 23.045 25.733 28.755 32.150 12.683 13.412 14.192 15.026 15.917 16.870 18.977 21.384 24.133 27.271 30.850 34.931 39.581 13.809 14.680 15.618 16.627 17.713 18.882 21.495 24.523 28.029 32.089 36.786 42.219 48.497 14.94715.974 17.086 18.292 19.599 21.015 24.215 27.975 32,393 37.581 43.672 50.818 59.196 16.097 17.293 18.599 20.024 21.579 23.276 27.152 31.772 37.280 43.842 51.660 60.965 72.035 22.019 24.297 26.870 29.778 33.066 36.786 45.762 57.275 72052 91.025 115.380 146.628 186.688 28.243 32.030 36,459 41,646 47.727 54.865 73.106 98.347 133.334 181.871 249 214 342603471.981 34.785 40.568 47.575 56.085 66.43979.058 113.283 164.494 241.333 356.787 530 312 790.948 1,181.882 48.886 60.402 75.401 95.026 120.800 154.762 259,057 442.593 767.091 1,342.025 2,380.757 4,163 213 7,343.858 Period 11 Period 12 Period 13 Period 14 Period 15 Period 20 Period 25 Period 30 Period 40 Periods 1% Period 1 0.990 Period 2 0.980 Period 3 0.971 Period 4 0.961 Period 5 0.951 Period 6 0.942 Period 7 0.933 Period 8 0.923 Period 9 0.914 Period 10 0.905 Period 11 0.896 Period 12 0.887 Period 13 0.879 Period 14 0.870 Period 15 0.861 Period 20 0.820 Period 25 0.780 Period 30 0.742 Period 40 0.672 Present Value of $1 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 0.961 0.943 0.925 0.907 0.890 0.857 0.826 0.797 0.769 0.743 0.7180.694 0.942 0.915 0.889 0.864 0.840 0.7940.751 0.712 0.675 0.641 0.609 0.579 0.924 0.888 0.855 0.823 0.792 0.735 0.683 0.636 0.592 0.552 0.516 0.482 0.906 0.863 0.822 0.784 0.747 0.681 0.621 0.567 0.519 0.476 0.437 0.402 0.888 0.837 0.790 0.746 0.705 0.630 0.564 0.507 0.456 0.410 0.370 0.335 0.871 0.813 0.760 0.711 0.665 0.583 0.513 0.452 0.400 0.354 0.314 0.279 0.853 0.789 0.731 0.677 0.627 0.540 0.467 0.4040.351 0.305 0.266 0.233 0.837 0.766 0.703 0.645 0.592 0.500 0.424 0.361 0.308 0.263 0.225 0.194 0.820 0.744 0.676 0.614 0.558 0.463 0.386 0.322 0.270 0.227 0.191 0.162 0.8040.722 0.650 0.585 0.527 0.429 0.350 0.287 0.237 0.195 0.162 0.135 0.788 0.701 0.625 0.557 0.497 0.397 0.319 0.257 0.208 0.168 0.137 0.112 0.773 0.681 0.601 0.530 0.469 0.368 0.290 0.229 0.1820.145 0.116 0.093 0.758 0.661 0.577 0.505 0.442 0.340 0.263 0.205 0.160 0.125 0.099 0.078 0.743 0.642 0.555 0.481 0.417 0.315 0.239 0.183 0.140 0.108 0.084 0.065 0.673 0.554 0.456 0.377 0.312 0.215 0.149 0.104 0.073 0.051 0.037 0.026 0.610 0.478 0.375 0.295 0.233 0.146 0.092 0.059 0.038 0.024 0.016 0.010 0.552 0.412 0.308 0.231 0.174 0.099 0.057 0.033 0.020 0.012 0.007 0.004 0.453 0.307 0.208 0.142 0.097 0.046 0.022 0.011 0.005 0.003 0.001 0.001 Future Value of $1 1% 1.010 1.020 1.030 1.041 1.051 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 1.276 6% 1.060 1.124 1.191 1.262 1.338 8% 1.080 1.166 1.260 1.360 1.469 Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 1.062 1.072 1.083 1.094 1.105 1.116 1.127 1.138 1.149 1.161 1.126 1.149 1.172 1.195 1.219 1.243 1.268 1.294 1.319 1.346 1.194 1.265 1.340 1.419 1.587 1.230 1.316 1.407 1.504 1.714 1.267 1.369 1.477 1.594 1.851 1.305 1.423 1.551 1.689 1.999 1.344 1.480 1.629 1.791 2.159 1.384 1.539 1.710 1.898 2.332 1.426 1.601 1.796 2.012 2.518 1.469 1.665 1.886 2.133 2.720 1.513 1.732 1.980 2.261 2.937 1.558 1.801 2.079 2.397 3.172 1.806 2.191 2.653 3.207 4.661 2.094 2.666 3.386 4.292 6.848 2.427 3.243 4.3225.743 10.063 3.262 4.801 7.040 10.286 21.725 10% 12% 14% 16% 18% 20% 1.100 1.120 1.140 1.160 1.180 1.200 1.210 1.254 1.300 1.346 1.392 1.440 1.331 1.405 1.482 1.561 1.643 1.728 1.464 1.574 1.689 1.811 1.939 2.074 1.611 1.762 1.925 2.100 2.288 2488 1.772 1.974 2.195 2.436 2.700 2.986 1.949 2211 2.502 2.826 3.185 3.583 2.144 2.476 2.853 3.278 3.759 4.300 2358 2.773 3.252 3.803 4.435 5.160 2.594 3.106 3.707 4411 5.234 6.192 2.853 3.479 4.226 5.117 6.176 7.430 3.138 3.896 4.818 5.936 7.288 8.916 3.452 4.363 5.492 6.886 8.599 10.699 3.797 4.887 6.261 7.988 10.147 12.839 4.177 5,474 7.138 9.266 11.974 15.407 6.727 9.646 13.743 19.461 27.393 38.338 10.835 17.000 26.462 40.874 62.669 95.396 17.449 29.960 50.950 85.850 143,371 237 376 45.259 93.051 188.884 378.721 750.378 1,469.772 Period 20 Period 25 Period 30 Period 40 1.220 1.282 1.348 1.489 1.486 1.641 1.811 2.208 1. Compute the payback period, the ARR, and the NPV of these two plans. What are the strengths and weaknesses of these capital budgeting models? 2. Which expansion plan should Cuppa choose? Why? 3. Estimate Plan A's IRR. How does the IRR compare with the company's required rate of return? Requirement 1. Compute the payback period, the ARR. and the NPV of these two plans What are the strengths and weaknesses of these capital budgeting models Begin by computing te payback period for both plane (Round your answers to cont decimal place) Plan A in years) Plan in years) Now compute the AA (hooounding rate of certum) for both plona Hound the percentages to the nearest torn percent) Plan A Plan Next compute the NPV (net presentender each plan. Begin with Pin Athen compute Pound your swers to the rest whole da parte eramusta negative NPV) Net present Value of Plan News of Match them with the strengths and weaknesses listed for each of the three capital Budgeting models Match the term with the strengths and weaknesses listed for each of the three capital budgeting models. Strengths and weaknesses Capital budgeting models Is based on cash flows, can be used to assess profitability, and takes into account the time value of money. It has none of the weaknesses of the other two models. Is easy to understand, is based on cash flows, and highlights risks. However, it ignores profitability and the time value of money, Can be used to assess profitability, but it ignores the time value of money. Requirement 2. Which expansion plan should Cuppa choose? Why? Recommendation, Invest in It has the net prosent value. It also has a payback period Requirement 3. Estimate Plan AY IRR. How does the IRR compare with the company's required rate of return? The IRR (internal rate of return) of Plan A is between This rate the company's hurdle rate of 6% Cuppen operes a chain of lunch. The company is considering til Poder hope of 58540.000 Eur 5.000 the end of ten years. Under Pas Cuppa would contrar shops of cost of 10.000. The plan is to generate how 100.000 per years, the properties. Estimated walls 31.100.000 Oppiaine dependem Catalon to view the runway de ore ( www the threauty 20% Present Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 Period 2 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.6901.647 1.605 1.566 1.528 Period 3 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 2.322 2.246 2.174 2106 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2.798 2.690 2.589 Period 5 4.853 4.713 4.580 4.452 4.329 4.2123.993 3.791 3.605 3.433 3.274 3.127 2.991 Period 6 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 3.889 3.685 3.498 3.326 Period 7 6.728 6.472 6.230 6.002 5.786 5.5825.206 4.868 4.564 4.288 4.039 3.812 3.605 Period 8 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 4.639 4.344 4.078 3.837 Period 9 8.566 8.162 7.786 7.435 7.108 6.802 6.247 5.759 5.328 4.946 4.607 4,303 4.031 Period 10 9.471 8.983 8.530 8.1117.722 7.360 6.710 6.145 5.6505.216 4.833 4.494 4.192 Period 11 10.368 9.787 9.253 8.760 8.306 7.887 7.139 6.495 5.938 5.453 5.029 4.656 4.327 Period 12 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.8146.194 5.660 5.197 4.793 4.439 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 6.424 5.842 5.342 4.910 4.533 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 6.628 6,002 5.468 5.008 4.611 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.6066.811 6.142 5.575 5.092 4.675 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.5147.4696.623 5.9295.353 4.870 Period 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 6.873 6.097 5.467 4.948 Period 30 25.808 22.396 19.600 17.292 15.372 13.765 11.2589.4278.055 | 7.003 6.177 5.517 4.979 Period 40 32 835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 | 8.244 7.105 6.233 5.548 4.997 Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Future Value of Annuity of $1 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2010 2.020 2.030 2040 2.050 2.060 2.080 2.100 2.120 2.140 2.160 2.180 2.200 3.030 3.060 3.091 3.122 3.153 3.184 3.246 3.310 3.374 3.440 3.506 3.572 3.640 4.060 4.122 4.184 4.246 4.310 4.375 4.506 4.641 4.779 4921 5.066 5.215 5.368 5.101 5.204 5.309 5.416 5.526 5.637 5.867 6.105 6.353 6.610 6.877 7.154 7.442 6.152 6,308 6.468 6.633 6.802 6.975 7.336 7.716 8.115 8.536 8.977 9.442 9.930 7.214 7.434 7.662 7.898 8.142 8.394 8.923 9.487 10.089 10.730 11.414 12.142 12916 8.286 8.583 8.892 9.214 9.549 9.897 10.637 11.436 12.300 13.233 14240 15.327 16.499 9.369 9.755 10.159 10.583 11.027 11.491 12.488 13.579 14.776 16.085 17519 19.086 20.799 10.462 10.950 11.464 12.006 12.578 13.1811448715.937 17.549 19.337 21.321 23.521 25.959 11.567 12.169 12.808 13.486 14.207 14.972 16.645 18.531 20.655 23.045 25.733 28.755 32.150 12.683 13.412 14.192 15.026 15.917 16.870 18.977 21.384 24.133 27.271 30.850 34.931 39.581 13.809 14.680 15.618 16.627 17.713 18.882 21.495 24.523 28.029 32.089 36.786 42.219 48.497 14.94715.974 17.086 18.292 19.599 21.015 24.215 27.975 32,393 37.581 43.672 50.818 59.196 16.097 17.293 18.599 20.024 21.579 23.276 27.152 31.772 37.280 43.842 51.660 60.965 72.035 22.019 24.297 26.870 29.778 33.066 36.786 45.762 57.275 72052 91.025 115.380 146.628 186.688 28.243 32.030 36,459 41,646 47.727 54.865 73.106 98.347 133.334 181.871 249 214 342603471.981 34.785 40.568 47.575 56.085 66.43979.058 113.283 164.494 241.333 356.787 530 312 790.948 1,181.882 48.886 60.402 75.401 95.026 120.800 154.762 259,057 442.593 767.091 1,342.025 2,380.757 4,163 213 7,343.858 Period 11 Period 12 Period 13 Period 14 Period 15 Period 20 Period 25 Period 30 Period 40 Periods 1% Period 1 0.990 Period 2 0.980 Period 3 0.971 Period 4 0.961 Period 5 0.951 Period 6 0.942 Period 7 0.933 Period 8 0.923 Period 9 0.914 Period 10 0.905 Period 11 0.896 Period 12 0.887 Period 13 0.879 Period 14 0.870 Period 15 0.861 Period 20 0.820 Period 25 0.780 Period 30 0.742 Period 40 0.672 Present Value of $1 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 0.961 0.943 0.925 0.907 0.890 0.857 0.826 0.797 0.769 0.743 0.7180.694 0.942 0.915 0.889 0.864 0.840 0.7940.751 0.712 0.675 0.641 0.609 0.579 0.924 0.888 0.855 0.823 0.792 0.735 0.683 0.636 0.592 0.552 0.516 0.482 0.906 0.863 0.822 0.784 0.747 0.681 0.621 0.567 0.519 0.476 0.437 0.402 0.888 0.837 0.790 0.746 0.705 0.630 0.564 0.507 0.456 0.410 0.370 0.335 0.871 0.813 0.760 0.711 0.665 0.583 0.513 0.452 0.400 0.354 0.314 0.279 0.853 0.789 0.731 0.677 0.627 0.540 0.467 0.4040.351 0.305 0.266 0.233 0.837 0.766 0.703 0.645 0.592 0.500 0.424 0.361 0.308 0.263 0.225 0.194 0.820 0.744 0.676 0.614 0.558 0.463 0.386 0.322 0.270 0.227 0.191 0.162 0.8040.722 0.650 0.585 0.527 0.429 0.350 0.287 0.237 0.195 0.162 0.135 0.788 0.701 0.625 0.557 0.497 0.397 0.319 0.257 0.208 0.168 0.137 0.112 0.773 0.681 0.601 0.530 0.469 0.368 0.290 0.229 0.1820.145 0.116 0.093 0.758 0.661 0.577 0.505 0.442 0.340 0.263 0.205 0.160 0.125 0.099 0.078 0.743 0.642 0.555 0.481 0.417 0.315 0.239 0.183 0.140 0.108 0.084 0.065 0.673 0.554 0.456 0.377 0.312 0.215 0.149 0.104 0.073 0.051 0.037 0.026 0.610 0.478 0.375 0.295 0.233 0.146 0.092 0.059 0.038 0.024 0.016 0.010 0.552 0.412 0.308 0.231 0.174 0.099 0.057 0.033 0.020 0.012 0.007 0.004 0.453 0.307 0.208 0.142 0.097 0.046 0.022 0.011 0.005 0.003 0.001 0.001 Future Value of $1 1% 1.010 1.020 1.030 1.041 1.051 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 1.276 6% 1.060 1.124 1.191 1.262 1.338 8% 1.080 1.166 1.260 1.360 1.469 Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 1.062 1.072 1.083 1.094 1.105 1.116 1.127 1.138 1.149 1.161 1.126 1.149 1.172 1.195 1.219 1.243 1.268 1.294 1.319 1.346 1.194 1.265 1.340 1.419 1.587 1.230 1.316 1.407 1.504 1.714 1.267 1.369 1.477 1.594 1.851 1.305 1.423 1.551 1.689 1.999 1.344 1.480 1.629 1.791 2.159 1.384 1.539 1.710 1.898 2.332 1.426 1.601 1.796 2.012 2.518 1.469 1.665 1.886 2.133 2.720 1.513 1.732 1.980 2.261 2.937 1.558 1.801 2.079 2.397 3.172 1.806 2.191 2.653 3.207 4.661 2.094 2.666 3.386 4.292 6.848 2.427 3.243 4.3225.743 10.063 3.262 4.801 7.040 10.286 21.725 10% 12% 14% 16% 18% 20% 1.100 1.120 1.140 1.160 1.180 1.200 1.210 1.254 1.300 1.346 1.392 1.440 1.331 1.405 1.482 1.561 1.643 1.728 1.464 1.574 1.689 1.811 1.939 2.074 1.611 1.762 1.925 2.100 2.288 2488 1.772 1.974 2.195 2.436 2.700 2.986 1.949 2211 2.502 2.826 3.185 3.583 2.144 2.476 2.853 3.278 3.759 4.300 2358 2.773 3.252 3.803 4.435 5.160 2.594 3.106 3.707 4411 5.234 6.192 2.853 3.479 4.226 5.117 6.176 7.430 3.138 3.896 4.818 5.936 7.288 8.916 3.452 4.363 5.492 6.886 8.599 10.699 3.797 4.887 6.261 7.988 10.147 12.839 4.177 5,474 7.138 9.266 11.974 15.407 6.727 9.646 13.743 19.461 27.393 38.338 10.835 17.000 26.462 40.874 62.669 95.396 17.449 29.960 50.950 85.850 143,371 237 376 45.259 93.051 188.884 378.721 750.378 1,469.772 Period 20 Period 25 Period 30 Period 40 1.220 1.282 1.348 1.489 1.486 1.641 1.811 2.208 1. Compute the payback period, the ARR, and the NPV of these two plans. What are the strengths and weaknesses of these capital budgeting models? 2. Which expansion plan should Cuppa choose? Why? 3. Estimate Plan A's IRR. How does the IRR compare with the company's required rate of return? Requirement 1. Compute the payback period, the ARR. and the NPV of these two plans What are the strengths and weaknesses of these capital budgeting models Begin by computing te payback period for both plane (Round your answers to cont decimal place) Plan A in years) Plan in years) Now compute the AA (hooounding rate of certum) for both plona Hound the percentages to the nearest torn percent) Plan A Plan Next compute the NPV (net presentender each plan. Begin with Pin Athen compute Pound your swers to the rest whole da parte eramusta negative NPV) Net present Value of Plan News of Match them with the strengths and weaknesses listed for each of the three capital Budgeting models Match the term with the strengths and weaknesses listed for each of the three capital budgeting models. Strengths and weaknesses Capital budgeting models Is based on cash flows, can be used to assess profitability, and takes into account the time value of money. It has none of the weaknesses of the other two models. Is easy to understand, is based on cash flows, and highlights risks. However, it ignores profitability and the time value of money, Can be used to assess profitability, but it ignores the time value of money. Requirement 2. Which expansion plan should Cuppa choose? Why? Recommendation, Invest in It has the net prosent value. It also has a payback period Requirement 3. Estimate Plan AY IRR. How does the IRR compare with the company's required rate of return? The IRR (internal rate of return) of Plan A is between This rate the company's hurdle rate of 6%
