I UOVI CVIUUII CU IOyun CO CI CHUO ILI VI uro. Jalue factor table blue factor table.) | Data Table A Data Table esses of these ca Period Period and weaknesses Present Value of Annuity of $1 6% 8% 10% 12% 14% 0.943 0.926 0.909 0.893 0.877 1.833 1.783 1.736 1.690 1.647 2.673 2.577 2.487 2.402 2.322 3.465 3.312 3.170 3.037 2.914 4.212 3.993 3.791 3.605 3.433 4.917 4.623 4.355 4.111 3.889 5.582 4.868 4.564 4.288 5.747 5.335 4.968 4.639 6.802 6.247 5.759 5.328 4.946 7.360 6.710 6.145 5.650 5.216 16% 0.862 1.605 2.246 2.798 3.274 3.685 4.039 4.344 4.607 4.833 6% 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 Present Value of $1 8% 10% 12% 0.926 0.909 0.893 0.857 0.826 0.797 0.794 0.751 0.712 0.735 0.683 0.636 0.681 0.621 0.567 0.630 0.564 0.507 0.583 0.513 0.452 0.540 0.467 0.404 0.500 0.424 0.361 0.463 0.386 0.322 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270 16% 0.862 0.743 0.641 0.552 0.476 0.410 0.354 0.305 0.263 0.227 rcent.) 6.210 ur answers to the Done Print Done A Data Table - x br table.) table.) Data Table hese capital Period 16% Period 6% 14% 16% 1.060 1.140 1.160 1.000 2.160 3.506 knesses of 1.124 1.300 Future Value of $1 8% 10% 12% 1.080 1.100 1.120 1.166 1.210 1.254 1.260 1.331 1.405 1.360 1.464 1.574 1.469 1.611 1.762 1.346 1.191 1.482 Future Value of Annuity of $1 6% 8% 10% 12% 14% 1.000 1.000 1.000 1.000 1.000 2.060 2.080 2.100 2.120 2.140 3.184 3.246 3.310 3.374 3.440 4.375 4.506 4.641 4.779 4.921 5.637 5.867 6.105 6.353 6.610 6.975 7.336 7.716 8.115 8.536 8.923 9.487 10.089 10.730 9.897 10.637 11.436 12.300 13.233 11.491 12.488 13.579 14.776 16.085 13.181 14.487 15.937 17.549 19.337 5.066 1.262 1.338 1.689 1.925 1.561 1.811 2.100 6.877 0 0 voor A w N- 1.419 1.587 1.974 2.195 2.436 au 8.394 1.504 1.714 1.772 1.949 2.144 2.211 8.977 11.414 14.240 17.519 21.321 2.502 2.826 1.594 2.853 3.278 1.851 1.999 2.159 2.358 1.689 1.791 2.476 2.773 3.106 3.803 3.252 3.707 va s to the nel 2.594 4.411 Print Done Print Done Heros operates a chain of hoagie shops. The company is considering two possible expansion plans. Plan A would open eight smaller shops at a cost of $8,840,000. Expected annual net cash inflows are $1,650,000 with zero residual value at the end of 10 years. Under Plan B, Heros would open three larger shops at a cost of $8,340,000. This plan is expected to generate net cash inflows of $1,200,000 per year for 10 years, the estimated life of the properties. Estimated residual value is $1,125,000. Heros uses straight-line depreciation and requires an : (Click the icon to view the present value annuity factor table.) 3 (Click the icon to view the present value factor table.) (Click the icon to view the future value annuity factor table.) B (Click the icon to view the future value factor table.) Requirements 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 Heros 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 the payback period for both plans. (Round your answers to one decimal place.) Plan A L years Plan B years Now compute the ARR (accounting rate of return) for both plans. (Round the percentages to the nearest tenth percent.) Plan A 0 % Plan B Next compute the NPV (net present value) under each plan. Begin with Plan A, then compute Plan B. (Round your answers to the nearest whole dollar and use parentheses or a minus sign to represent a negative NPV.) Net present value of Plan A Net present value of Plan B