Lulus Company operates a chain of sandwich Shops Click the loon to view additional information) Read the moments (Click the icon to view Present Value of $1 table) (Click the icon to view Present Value of Ordinary Annuity of $1 table (Click the icon to view Future Value of $1 table) (Click the icon to view Future Value of Ordinary Annuity of $1 table. 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, XX.) Amount invested Expected annualnatcash now Payback Plan A $ 8,400,000 1,525.000 5.5 years Pan B 8,240,000 1,000,000 3.2 years Calculate the ARR (counting rate of return for both plans. Round your answers to the restant percent, XXL) Average annual operating income Average amount invested Plan A $ A.DDD 4,200,000 16.2 Plan B $ 296,000 4.720,000 = 6.3% Caciulate the NPV inot present value of each plan. Begin by calculating the NPV of Pan A Complete all answer boxes. Enter a ''for any or balances or amounts that do not apply to the plan. Enter any factor amounts to three decimal places, XXXC Use parentheses or a minus sign for a negative not present value.) Plan : Net Cach Annuity PV Factor PV Fastor Present Years Inflow (99, 10) (9%, 10) Value 1 - 10 Procent value of annuity 10 Present of residual value Total PV of cash inflows 0 Initial Investment Net procent value of Plan A A Requirements - X 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 Lulus Company choose? Why? 4. Estimate Plan A's IRR. How does the IRR compare with the company's required rate of return? Print Done More Info 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 $1,525,000 for 10 years, with zero residual value at the end of 10 years. Under Plan B, Lulus Company would open three larger shops at a cost of $8,240,000. This plan is expected to generate net cash inflows of $1,000,000 per year for 10 years, the estimated useful life of the properties. Estimated residual value for Plan B is $1,200,000. Lulus Company uses straight-line depreciation and requires an annual return of 8%. Print Done