Division D is considering two possible expansion plans. Plan A would expand a current product line at a cost of $8,550,000. Expected annual net cash inflows are$1,625,000, with zero residual value at the end of 10 years. Under Plan B, Division D would begin producing a new product at a cost of $8,000,000. This plan is expected to generate net cash inflows of $1,090,000 per year for 10years, the estimated useful life of the product line. Estimated residual value for Plan B is$1,200,000. Division D uses straight-line depreciation and requires an annual return of 9%.

Use Excel to verify the NPV calculations 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 rate of return?

Begin by using Excel to calculate the NPV of both plans

The NPV (net present value) of Plan A is $_____

The NPV (net present value) of Plan B is $_____