Lados Campany operates a chain of sandwich shopt (Cick the icon to vieme Present Value of 5 t table.) (1) (Cick the icon to view additional intormation.) (Cick the icon to vew Present Value of Ordinary Annuly of \$1 table.) Read the tequirements (Click the icon to view Fulure Value of $1 table.) (Clck the icon to view Future Value of Ordinary Avnuity of \$1 table.) Requirement 1. Compute the payback the ARR, the NPV, and the profiabilty index of these teo plans. Calcutate the paybock for both plans. (Rround your answers to one decimal plact. X.) (Click the icon to view Future Value More info The company is considering two possible expansion plans. Plan A would open eight smaller shops at a cost of $8,550,000. 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, Lados Company would open three larger shops at a cost of $8,100,000. This plan is expected to generate net cash inflows of $1,080,000 per year for 10 yeats, the estimated useful life of the properties. Estimated residual value for Plan B is $980,000. Lados Company uses straight-line depreciation and requires an annual return of 10%. 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 Company choose? Why? 4. Estimate Plan A's IRR. How does the IRR compare with the company's required rate of return? Reference Reference Reference Reference Reference rent Value of $1 table. zent Value of Ordinary re Value of $1 tabie.) re Value of Ordinary A Reference Reference Reference Jent Value of $ ent Value of re Value of $1 re Value of Or