in this project. ck, ARR, NPV, IRR, and profitability index to make capital p11-30A Using payback, ARR. N investment decisions Lados operates a chain Learning Objectives 2,4 Expected annual net cas end of 10 years. Under Plan a chain of sandwich shops. The company is considering two possible sion plans. Plan A would open eight smaller shops at a cost of nual net cash inflows are $1,600,000, with zero residual value at the years. Under Plan B, Lados would open three larger shops at a cost of 000 This plan is expected to generate net cash inflows of $1.090.000 per var 0 vears, the estimated useful life of the properties. Estimated residual value for Bis $1,300,000. Lados uses straight-line depreciation and requires an annual 1. Plan A 1.19 profitability inde Plan B 5(755,780) NPV return of 9%. Requirements 1. Compute the payback, the ARR, the NPV, and the profitability index of these two plans. 2. What are the strengths and weaknesses of these capital budgeting methods?! 3. Which expansion plan should Lados choose? Why?! 4. Estimate Plan A's IRR. How does the IRR compare with the company's required rate of return