Hill Company operates a chain of sandwich shops. (Click the icon to view additional information.) 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.) Plan A Plan B $ Amount invested 8,700,000 8,340,000 Expected annual net cash inflow 1,550,000 990,000 Payback 5.6 years 8.4 years (Click the icon to view Present Value of $1 table.) Cal, the inn i Det Value of Ordinan Ano 21 table> Calculate the ARR (accounting rate of return) for both plans. (Round your answers to the nearest tenth percent, X.X%.) Average annual operating income Plan A $ Plan B $ 680,000 276,000 Average amount invested + $ 4,350,000 4,770,000 ARR 15.6 % 5.8 % 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: Years 1-10 Present value of annuity 10 Present value of residual value Total PV of cash inflows 0 Initial Investment Net present value of Plan A Net Cash Annuity PV Factor Inflow (i=10%, n=10) PV Factor (i=10%, n=10) Present Value Requirements 1. Compute the payback, the ARR, the NPV, and the profitability index of these two plans. 824,750 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?