Homework: Chapter 26 Homework Score: 0.15 of 1 pt P26-31A (similar to) 3 of 3 (3 complete) Leches Company operates a chain of sandwich shops. (Click the icon to view additional information.) Read the requirements. 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 Expected annual net cash inflow Plan A $ 8,400,000 $ 1,550,000 Plan B 8,240,000 1,100,000 1 Payback 5.4 years 7.5 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 Plan B Meerence Periods 6% 7% 1% | 0.990 0.980 0.971 0.961 0.951 0.942 0.933 0.923 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 0.162 2% 3% 0.9800.971 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 0.8040.722 0.788 0.701 0.773 0.681 0.7580.661 0.743 0.642 0.728 0.623 0.714 0.605 0.700 0.587 0.686 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 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 Present Value of $1 8% 10% 12% 0.9520.943 0.935 0.926 0.917 0.909 0.893 0.907 0.890 0.873 0.8570.8420.826 0.797 0.864 0.840 0.816 0.794 0.772 0.751 0.712 0.823 0.792 0.763 0.735 0.708 0.683 0.636 0.784 0.747 0.713 0.681 | 0.650 0.621 0.587 0.746 0.705 0.666 0.630 0.596 0.564 0.507 0.711 0.665 0.623 0.583 0.547 0.513 0.452 0.677 0.627 0.582 0.540 0.502 0.467 0.404 0.6450.5920.544 0.500 0.460 0.424 0.361 0.614 0.558 0.508 0.463 0.422 0.386 0.322 0.585 0.527 0.475 0.429 0.388 0.350 0.287 0.557 10.497 0.444 0.397 0.356 0.319 0.257 0.530 0.469 0.415 0.368 0.326 0.290 0.229 0.505 0.442 0.388 0.340 0.299 0.263 0.205 0.481 0.417 0.362 0.315 0.275 0.239 0.183 0.458 0.394 0.339 0.292 0.252 0.218 0.163 0.436 0.371 0.317 0.270 0.231 0.198 0.146 0,416 250 0.296 | 0250 0.212 0.180 0.130 0.396 0.331 0.277 0.232 0.194 0.1640.116 0.116 0.377 0.312 0.258 0.215 0.178 0.149 0.104 0.359 0.294 0.2420.1990.1640.135 0.093 0.342 0.278 0.226 0.184 0.150 0.123 0.083 0.326 0.262 0211 0.1700.138 0.112 0.074 0.310 0.247 0.197 0.158 0.126 0.1020.066 0.295 0.233 0.184 0.146 0.116 0.092 0.059 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270 0.237 0.208 0.182 0.160 0.140 0.123 0.108 0.095 0.083 0.083 0.073 0.064 0.056 0.049 0.043 0.038 15% 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 0.215 0.187 0.163 0.141 0.123 0.107 0.093 0.081 0.070 0.061 0.053 0.046 0.040 0.035 0.030 16% 18% 20% 0.862 0.847 0.833 0.7430.7180.694 0.641 0.609 0.579 0.552 0.516 0.482 0.476 0.437 0.402 0.410 0.370 0.335 0.354 0.314 0.279 0.305 0.266 0.233 0.263 0.225 0.194 0.227 0.191 0.195 0.162 0.135 0.168 0.137 0.112 0.145 0.116 0.093 0.125 0.099 0.078 0.108 0.084 0.093 0.071 0.054 0.080 | 0.060 0.045 0.069 0.051 0.038 0.060 0.043 0.031 0.044 0.038 0.033 0.028 0.024 0.031 0.026 0.022 0.019 0.016 0.022 0.018 0.015 0.013 0.010 Print Done 0 Reference Periods 6% 20% 2531 0.847 1.566 2.174 2.690 3.127 3.498 3.812 4.078 4.303 6.463 Present Value of Ordinary Annuity of $1 1% 2% 3% 5% 10% 12% 14% 15% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 1.970 1.942 1.913 1.886 1.859 1.8331.808 1.783 1.759 1.736 1.690 1.847 1.626 2.9412.884 2.8292775 2.723 2.673 2.624 2577 2487 2.402 2322 2.283 2002 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.855 4.853 4.713 4.580 4.452 4.329 4212 4.100 3.993 3.890 3.791 3.605 3.433 3.352 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.111 3.889 3.784 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.5644 288 7.652 7.325 7,020 6.733 6.210 5.971 5.747 5.535 5.335 4.9684.639 4.487 8.566 8.162 7.786 7.435 7.108 6.802 6.515 5.9955.759 53284946 4.772 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.6505.216 10.368 9.7879.253 8.760 8.306 7.8877.499 7.139 6.805 6.495 5938 5,453 5.234 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.5367.1616.8146.1945.660 5.421 12.134 11.348 10.635 9.986 9.3948.853 8.358 7.9047.487 7.103 6.424 5.8425.583 13.004 12.106 11 296 10.563 9.899 9.295 8.745 8.2447.786 7.367 6.628 6.002 5.724 13.865 12.849 11.938 11.118 10.380 9.7129.108 8.5598.061 7.606 6.811 6.142 5.847 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.8246.9746.265 5.954 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 3.022 7.120 6373 16.398 14.992 13.754 12.659 11 690 10.828 10.059 9.3728.7568201 7.250 6.467 6.128 17.226 15.678 14 324 13.13412085 11.15810.336 9.604 8.950 8.365 7.366 6.550 6.198 18.046 16.351 14.877 13.590 12.462 11470 10.5949.818 9.129 8.514 7.4696.623 6.259 18.857 17.01115,415 14.029 12.821 11.764 10.836 10.0179.292 8.649 7.5626.687 19.660 17.658 15,937 14.451 13.163 12.042 11.061 10.2019.442 8.772 7.645 6.743 6.359 20.456 18.292 16.444 14.857 13.489 12.303 11272 10.371 9.5808.883 7.718 6.792 6.399 21.243 18.914 16.936 15 247 13.799 12.550 11469 10.529 9.707 8.985 7.784 6.835 6.434 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.8239.077 7,843 6.873 6.464 16% 0.862 1.605 2246 2.798 3274 3.685 4.039 4344 4.607 4.833 5.029 5.197 5.342 5.468 5.575 5.669 5.749 5.818 5.877 5.929 5.973 6.011 6.044 6.073 6.097 4.656 4.793 4.910 5.008 5.092 5.162 5.222 5273 5.316 5.353 5.384 5.410 5.432 5.451 5.467 0.833 1.528 2.106 2589 2991 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 4909 4.925 4.937 4.948 6.312 Print Done 0 Reference Periods WPV wer plan 1% 2% 3% 1.010 1.020 1.030 1.020 1.0401.061 1.030 1.061 1.093 1.041 1.0821.126 1.051 1.104 1.159 1.062 1.126 1.194 1.072 1.149 1.230 1,083 1.1721.267 4004 1.195 1.305 1.105 1.219 1.344 1.116 1.243 1.384 1.127 1.2681.426 1.1381.2941.469 1.149 1.319 1.513 1.161 1.346 1.558 1.173 1.3731,605 1.184 1.400 1.653 1.196 1428 1.702 1.208 1.457 1.754 1.220 1.486 1.806 1.232 1.516 1.860 1.245 1.546 1.916 1.257 1.577 1,974 1.270 1.608 2.033 1.282 1.641 2.094 Future Value of $1 4% 5% 6% 8% 9% 10% 12% 14% 15% 1.040 1.050 1.0601.070 1.080 1.090 1.100 1.120 1.140 1.150 1.0821.1031.1241.145 1.166 1.1881.210 1.254 1.300 1.323 1.125 1.1581.191 1.225 1.260 1.295 1.331 1.405 1.482 1.521 1.170 1.216 1.262 1.311 1.360 1.412 1.464 1,574 1.689 1.749 1.217 1.276 1.338 1.403 1.469 1.539 1.611 1.762 1.925 2.011 1.265 1.340 1.419 1.501 1.587 1.677 1.772 1.9742.195 2.313 1.316 1.407 1.5041.606 1.7141.828 1.949 2.211 2.502 2.660 1.369 1.4771.594 1.718 1.851 1.993 2.144 2.144 2.476 2.476 2.853 3.059 1423 1.551 1.689 1.838 1.999 2.172 2.358 2.773 3.252 3.518 1.480 1.629 1.791 1.967 2.159 2.367 2.594 3.106 3.707 4.046 1.539 1710 1.898 2.105 2.3322.580 2.853 3.479 4.226 4.652 1.601 1.796 2012 2.252 2518 2.813 3.138 3.896 4.818 5.350 1.665 1.886 2133 2.410 2720 3.066 3.452 4.363 5,492 6.153 1.732 1.980 2.579 2.937 3.342 3.798 4.887 6.2617.076 1.801 2.079 2.3972.759 3.172 3.642 4.177 5.474 7.138 8.137 1.873 2.183 2.540 2.952 3.426 3.970 4.595 6.130 8.137 9.358 1.948 2.292 2.693 3.159 3.700 4.328 5.0546.8669.276 10.76 2.026 2.407 2.854 3.380 3.996 4.717 5.5607.690 10.58 12.38 2.107 2.527 3.026 3.6174.316 5.1426.116 8.613 12.06 14.23 2.191 2.653 3.207 3.870 4.661 5.604 6.727 9.646 13.74 16.37 2.279 2.786 3.400 4.141 5,034 6.109 7.400 10.80 15.67 18.82 2.370 2.925 3.604 4.430 5.437 6.659 8.140 12.10 17.86 21.64 2.465 3.072 3.820 4.741 5.871 7.258 8.954 13.55 20.36 24.89 2.563 3.225 4.049 5.0726.341 79119.850 15.18 23.21 28.63 2666 3.386 4.292 5.427 6.848 8.623 10.83 17.00 26.46 32.92 Print Done Reference 7% 15% 1.000 2.150 3.473 4.993 6.742 8.754 Periods 1% 12% 1 1.000 1.000 2 2.010 2020 3 3.0303.060 4.060 4.122 5 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 15.97 16.10 17.29 17.26 18.64 20.01 19.61 21.41 20.81 22.84 22.02 24.30 23.24 25.78 24.47 27.30 25.72 28.85 26.97 30.42 28.24 32.03 Future Value of Ordinary Annuity of $1 3% 4% 5% 8% 9% 10% 12% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2030 2040 2.050 2.0602870 2.080 2090 2.100 2.120 3.091 3.122 3.153 3.1843.215 3.246 3.278 3.310 3.374 4.1844.246 4.310 4.375 4.440 4.506 4.5734.641 4.779 5.309 5.416 5.526 5.637 5.7515.867 5.985 6.105 6.353 6.468 6.633 6.802 6.975 7.1537.336 7.523 7.7168.115 7.662 7.898 8.142 8.394 8.654 8.923 9200 9.487 10.09 8.8929.214 9.549 9.897 10.260 10.64 11.03 11.44 12.30 10.16 10.58 11.03 1149 11.98 12.49 13.02 13.5814.78 11.46 12.01 12.58 13.18 13.82 14.49 15.19 15.94 17.55 12.81134914.21 14.97 15.78 16.65 17.56 18.53 20.65 14.19 15.03 15.92 16.87 17.89 18.98 21.38 24.13 15.62 16.63 17.71 18.88 20.14 21.50 22.95 24.52 28.03 17.09 18.29 19.60 21.02 26.02 32.39 18.60 20.02 21.58 23.28 31.77 37.28 20.16 21.82 23.66 25.67 27.89 30.32 33.00 35.95 42.75 21.76 25.84 28. 21 30.84 33.75 36.97 40.54 48.88 23.41 28.13 30.91 34,00 37.45 41.30 45.60 55.75 25.12 30.54 33.76 | 37.38 41.45 46.02 51.16 63.44 26.87 29.78 33.07 36.79 41.00 45.76 51.16 5728 72.05 28.68 31.97 35.72 39.99 44.87 50.42 56.7664.00 81.70 30.54 34.25 38.51 43.39 49.01 55.46 62.87 71.40 92.50 32.45 36.62 41.43 47.00 53.44 60.89 69.53 79.54 1046 39.08 44.50 50.82 58.18 66.76 76.79 88.50 118 2 36.46 41.65 47.73 54.86 63 25 73.11 84.70 98.35 133 3 20.14 14% 1.000 2.140 3.440 4.921 6.610 8.536 10.73 13.23 16.09 19.34 23.04 27.27 32.09 37.58 43.84 50.98 59.12 68.39 78.97 9102 104.8 120.4 138.3 158.7 1587 181.9 2799 25.13 13.73 16.79 20.30 24.35 29.00 34.35 40.50 47.58 55.72 65.08 75.84 88.21 1024 118.8 .137.6 159.3 23.10 3443 1842 212.8 Print Done Fitabi i More Info mal ecte nur an The company is considering two possible expansion plans. Plan A would open eight smaller shops at a cost of $8,400,000. 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, Leches Company would open three larger shops at a cost of $8,240,000. This plan is expected to generate net cash inflows of $1,100,000 per year for 10 years, the estimated useful life of the properties. Estimated residual value for Plan B is $980,000. Leches Company uses straight-line depreciation and requires an annual return of 7%. Print Done