mpany operates a chain of sandwich shops Click the icon to view Present Value of $1 table) More Info Reference WE The company is considering two posible expansion plans Plan A would open it malershops at a cost of $8,550.000. Expected sal net cashows are 51.625.000 for 10 years, wth zero res value at the end of 10 years Under Pan Bolas Company would open the larger shops at a cost of $8.250.000 This is spected to generate net cash whows of $1.000.000 per year for 10 years, the mede of the properties. Estimated residual value for Pan Bis 51.000.000 Lola Company uses the depreciation and requires an annual return of NAF 908D the Print Done Requirements Present of Period 15 45 12 se 0.00 0.910920 0975 0.0087 OBOS 7708700 2 0.00 0.61 0.000 0.000 0890 0. ST 0842 3 O 0799 0796 0.91 0.239.140.00 0.13 0790 0.772 0.75 0.858 0.500.579 4 0.061 0824 GBS 0.25 023 0.7920707080683 0.636 2020 0.50 0482 5 03 002 0707073 0.581 0.821 09 0.519 0497 0418 0.437 0.000 5 OM. OBNO 0.70 0.656 0830 0540SOT 0456 0.412 04100700335 081 070 071006003 0547 0.513 0452 0.400 0.375 0.3540302 3 0.125 0.25 0731 0670582 015100502 0.467 0.004035 0.0 0.20 0.200 9 0.914 DNI 79 07030645 0.52 05 Da 0.361 0.30 0.2 0.250 0.325 11 13 0001200000.550.00 0.000 42 0 0.22 0.20 0.2 0.227 0.11 0.12 0.0.722005270415 0420388 350 021 0.215 0.15 12 DE? 0.001 0.65 0.557 0.0 0.00 0.00 0200.17 0.100.101 13 0.773 0.00 0.50 0.400.450. 0.0200.229 10.10 0.145 14 0.0 0.750 0.57 0.0 42.50.340 0.20 0.20 0.205 0.100.14 0.125.000 0.00 0.42 0.484 0315 0295 0200.180 0.100.12 0.000000 0726 DOS 450.30000292022 0.210 0.05 0.313 0.3 0.37 0.20 0.23 0.1 0.0001 0.044 0700 0.148 0.100 000 DO SAT 044 0.41 0.15 0.2 0.00 020 19 0.60 0051 0.570 0475 0.33 027 0212 0.80 02.11 0.154 08 0994 30.10.25 0.3 0.110 6.104 093 01 0051 0.017 0.000 0409 0.35020242 0.19 0.1640.135 22 0503 0.00 0.004005 004 1.522 0422 0.420.218 0031 0795 SOT 0302 0.1M150.000.000 0 170 120.000.00 OM 04 0.02 0015 0.30 030 ON 0.1 0.12 0.10 0.00 0.00 0.00 0610 0.375 02 623 DIM 0196 0.00 DO 0.010 172041 0210102200172 0.00 0.00 0.00 0.00 0.0 974 0.450.000 1 010100140.000 0.125 DOMON 0.00 675 OSN 33 25.10.150 0.00 0.018 0192 0.000000 001 0.000 23 DAN 321 3.141 30 012 04120020114031 | 14 0.00 0.00 0.0 0.000 0015 000.00 0.62 0458002080.100.000 10.000.000.000 0.0011 COS MOM 0.00 A: 1. Compute the payback, the ARR the NPV, and the probability index of these 2. What are the stand weaknesses of these capital budgeting methods? 1. Which expansion should Les Company? Why? 4. Pan A. How does the compare with the company's WO DOWO BHD ICOD 00 DD NE Done We Neth Any PV Factor Inow PV Factor PA OF ostrom anyone any beint fields and then continue to the next question De bf $1 Reference 8% of 2.283 3.170 6 5.650 a you $16 Present Value of Ordinary Annuity of $1 5% Periods 6% 1% 7% 2% 9% 15% 3% 10% 16% 12% 18% 14% 20% 0.990 0.980 0.971 0.952 0.962 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.847 0.870 0.833 0.862 1.942 1.913 1.888 1.859 2 1.833 1.808 1.970 1.783 1.690 1.759 1.647 4736 1.626 1.605 1.528 1.556 2624 2.884 2.829 2.775 2.723 2673 2.577 3 2.941 2531 2.487 2.402 2.322 2.246 2.106 2.174 -cin 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3240 3,037 2.914 2.855 2.798 2.690 2.589 4.8534.7134.580 4.452 4329 4.212 4.100 3.993 3.890 5 3.791 3.605 3.433 3.352 3.274 3.127 2.991 5.795 5.601 5.417 5242 5.076 4.917 4.767 4.623 4.486 4.355 4.111 3.889 3.784 3.685 3.498 3.326 7 6.728 6.472 6.230 6.002 5.76 5.582 5.389 5.206 5,033 4.868 4.564 4.288 4.160 4.039 3.812 3.605 7.652 8 7,325 7020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.487 4.344 3.837 4.078 9 8.586 8.1627.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.328 4.946 4.772 4.607 4303 4,031 10 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.216 5.019 4.833 4.494 4.192 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.938 5.453 5.234 5.029 4.656 4327 12 11.255 10.575 9.954 9.3858.863 8.384 7.943 7.536 7.161 6.814 6.194 5.660 5.421 5.197 4.793 4439 13 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7487 7.103 6.424 5.842 5583 5.342 4.910 4.533 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.724 5.468 5.008 4.611 15 13.865 12.849 11.93811.118 10 380 9.7129.108 8.559 8061 7.606 6.811 6.142 5.847 5.575 5.092 4.675 ulating 16 14.718 13.578 12.561 11652 10.838 10.106 9447 8.851 8.313 7.824 6.974 6.265 5.954 5.669 5.162 4.730 mounts 17 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.022 7.120 6.373 6.047 5.749 5.222 4.775 18 16.398 14.992 13.754 1265911.690 10.828 10.059 9.372 8.756 8.201 7.250 6.467 6.128 5.818 5.273 4.812 nuity 19 17.226 15.678 14,32413.1341208511.15810.336 9.604 8.950 8.365 7.366 6.550 6.198 5.877 5.316 4.844 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.129 8.514 7.469 6.623 6.259 5.929 5.353 4.870 (18% 21 18.8571701115.415 14.029 12821 11.764 10.836 10.0179292 8.649 7.582 6.687 6.312 5.973 5.384 4.891 22 19.660 17.658 15.93714.451 13.163 12.042 11.06110 201 9.442 8.772 7.645 6.743 6.011 5.410 23 20.456 18.292 16.444 14.857 13.489 12.303 11.272 10.371 9.580 8.883 7.718 6.792 6.399 6.044 5.432 4.925 24 21.243 18.914 16.936 15.247 13.799 12.550 11.489 10.529 9.707 8.985 7.784 6.835 6.434 6.073 5.451 4.937 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 7.843 6.873 6.484 6.097 5.467 4948 26 22.796 20.1211787715.983 14.375 13.003 11.826 10.810 9.929 9.161 7.896 6.906 6.491 6.118 5.480 4.956 27 23.560 20.707 18.327 18.33014643 13.21111.987 10.935 10.027 9.237 7.943 6.935 6.514 6.136 5.492 4.964 28 24.31621.28118.764 16,863 14.898 13.406 12.137 11.051 10.116 9.307 7.984 6.961 6.534 6.152 5.502 4.970 29 25.066 21.844 19.188 16.984 15.141 13.591 12.278 11.158 10.198 9.370 8.022 6.983 6.551 6.166 5.510 4.975 30 25.808 22.396 19.600 17.292 15.372 13.765 12.409 11.258 10.2749.427 cer a "0" for 8.055 7.003 6.566 6.177 5.517 4979 minus sign 40 32.835 27.355 23.115 19.793 17.159 15.046 13.332 11.925 10.757 9.779 8.244 7.105 6.642 6.233 5.548 4.997 Annuity 50 39.196 31 424 25.730 21.482 18256 15.762 13.801 12.233 10.962 9.915 8.304 7.133 6.661 6.246 5.554 4.999 (18% 6.359 4909 Print Done elds and the room MacBook Pro Anr Future Value off1 1 2 1464 Periods 1% 2% 3% 4% 5% 6% 1,010 1,020 1.030 1.040 1,050 1.060 1.020 1.040 1.061 1,082 1.103 1.124 3 1.030 1,061 1.093 1.125 1.158 1.191 4 1.041 1.082 1.126 1.170 1.216 1.262 5 1,051 1.104 1.159 1217 1.276 1.338 6 1.062 1.126 1.194 1.265 1.340 1419 7 1,072 1.149 1.230 1.316 1.407 1.504 8 1.083 1.1721.267 1.369 1.477 1.594 9 1,094 1.195 1.305 1423 1.551 1.689 10 1.105 1.219 1.344 1480 1.629 1.791 11 1.116 1.243 1.384 1.539 1.710 1.898 12 1.127 1.268 1.426 1.601 1.796 2012 13 1.138 1.294 1.469 1.665 1.886 2.133 14 1.149 1.319 1.513 1.732 1.980 2.261 15 1.161 1.346 1.558 1.801 2.079 2.397 16 1.173 1.373 1.605 1.873 2.183 2.540 17 1.184 1.400 1653 1.948 2.292 2.693 18 1.196 1428 1.702 2.026 2407 2,854 19 1 208 1.457 1.754 2.107 2527 3.026 20 1.220 1486 1.806 2.191 2.653 3.207 21 1232 1.516 1.860 2.279 2.786 3.400 22 1.245 1546 1.916 2.370 2.925 3.604 23 1.257 1.577 1.974 2.465 3072 3.820 24 1.270 1.608 2.033 2563 3.225 4049 25 1282 1.641 2094 2.666 3.386 4.292 1.295 1.673 2.157 2.772 3.556 4.549 27 1.308 2221 2883 3.733 4.822 28 1.321 1,741 2288 2.999 3.920 5.112 29 1335 1.776 2357 3.119 4.116 5.418 30 1.348 1.811 2.427 3.243 4322 5.743 40 1.4892208 3.262 4.801 7.040 10.29 50 1.545 2.692 4.384 7.107 11.47 18.42 7% 8% 9% 10% 12% 14% 15% 1.070 1.080 1.090 1.100 1.120 1.140 1.150 1.145 1.166 1.188 1 210 1 254 1.300 1.323 1.225 1.260 1296 1.331 1.405 1.482 1.521 1.311 1.360 1.412 1.574 1.689 1.749 1.403 1.469 1.539 1.611 1.762 1.925 2.011 1.501 1.587 1.677 1.772 1.974 2.196 2.313 1.606 1.714 1.828 1.949 2.211 2.502 2660 1.718 1.851 1.993 2.144 2.476 2853 3.059 1.838 1.999 2.172 2358 2.773 3.252 3.518 1.967 2.159 2.367 2.594 3.106 3.707 4,046 2.105 2.332 2580 2.853 3.479 4.226 4.652 2.252 2518 2813 3.138 3.896 4.818 5.350 2.410 2.720 3.066 3.452 4.363 5.492 6.153 2.579 2.937 3.342 3.798 4.887 6.261 7.076 2.759 3.172 3.842 4.177 5.474 7.138 8.137 2.952 3.426 3.970 4.595 6.130 8.137 9358 3.159 3.700 4.328 5.054 6.866 9.276 10.76 3.380 3.996 4.717 5.560 7.690 10.58 12.38 3.617 4.316 5.142 6.116 8.613 12.06 14.23 3.870 4.661 5.604 6.727 9.646 13.74 16.37 4.141 5.034 6.109 7.400 10.80 15.67 18.82 4.430 5.437 6.659 8.140 12.10 17.86 21.64 4.741 5.871 7258 8.954 13.55 20.38 24.89 5,072 6.341 7.911 9.850 15.18 23.21 28.63 5.427 6.848 8.623 10.83 17.00 26.46 32.92 5807 7396 9.399 11.92 19.04 30.17 37.86 6.214 7.988 10.25 13.11 21.32 34.39 43.54 6649 8.627 11.17 14.42 23.88 39.20 50.07 7.114 9.317 12.17 15.88 26.75 44.69 57.58 7.612 10.06 13.27 17.45 29.96 50.95 66.21 14.97 21.72 31 41 45 26 93.05 188.9 2679 29.46 46.90 74.36 1174 289.0 700.2 1,084 factor Etd 1.707 zer ses or an Facto 10) Print Done contint G Search or type URL i Reference 1 1.000 6.308 7 8 Future Value of Ordinary Annuity of $1 Periods 1% 3% 2% 4% 5% 6% 7% 8% 9% 10% 15% 12% 14% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2 2.020 2030 2040 2050 2.010 2060 2070 2080 2.090 2.100 2.120 2.140 2.150 3 3.0303.060 3.091 3.122 3.153 3.184 3.215 3.246 3.278 3310 3.374 3.440 3.473 4 4.122 4.184 4.060 4246 4310 4.375 4.440 4.506 4.573 4641 4.779 4.993 4.921 5 5.101 5204 5.309 5.416 5.526 5.637 5.751 5,867 5.985 6.105 6.353 6.610 6.742 6 6.152 6.468 6.633 6.802 6.975 7.1537.336 7523 7.716 8.115 8.536 8.754 7214 7.434 7.662 7.898 8.142 8.394 8.654 8.923 9.200 9.487 10.09 10.73 11.07 8.286 8.583 8.892 9.214 9.549 9.897 10.260 10.64 11.03 11.44 12.30 13.23 13.73 9 9.369 9.755 10.16 10.58 11.03 11.49 11.98 12.49 13.02 13.58 14.78 16.09 16.79 10 10.46 10.95 11.46 12.01 12.58 13.18 13.82 14.49 15.19 15.94 17.55 19.34 20.30 11 11.57 12.17 12.81 13.49 14.21 14.97 15.78 16.65 17.56 18:53 20.65 23.04 24.35 12 12.68 13.41 14.19 15.03 15.92 16.87 17.89 18.98 20.14 21.38 24.13 27.27 29.00 13 13.81 14.68 15.62 16.63 17.71 18.88 20.14 21.50 22.95 24.52 28.03 32.09 34 35 14 14.96 15.97 17.09 18.29 19.60 21.02 22.55 24.21 26.02 27.98 32.39 37.58 40.50 15 16.10 17.29 18.60 20.02 21.58 23.28 25.13 27.15 29.38 31.77 37.28 43.84 47.58 16 17.26 18.64 20.16 21.82 23.66 2567 27.89 30.32 33.00 35.95 42.75 50.98 55.72 17 18.43 20.01 21.76 23.70 25.84 28 21 30.84 33.75 36.97 40.54 48.88 59.12 65.08 18 19.61 2141 23.41 25.65 28.13 30.91 34.00 37.45 41.30 45.60 55.75 68.39 75.84 19 20.81 2284 25.12 27.67 30.54 33.76 37 38 41.45 46.02 51.16 63.44 78.97 88 21 20 22.02 24.30 26.87 29.78 33.07 36.7941.00 45.76 51.16 57.28 7205 91.02 102.4 21 23 24 25.78 28.68 31.97 35.72 39.99 4487 50.42 56.76 64.00 81.70 104.8 118.8 22 2447 27.30 30.54 34.25 38.51 49.01 55.4662.87 71.40 92.50 120.4 137.6 23 25.72 28.85 3245 36.6241.43 47.00 53.44 60.89 69.53 79.54 104.6 138.3 1593 24 26.97 30.42 34.43 39.08 44.50 50.82 58.18 66.7876.79 88.50 1182 158.7 1842 25 28.24 32.03 36.46 41.65 47.73 54.86 63.25 73.11 84.70 133.3 181.9 212.8 26 29.53 33.67 38.55 44.31 51.11 59.16 68.68 79.9593.32 1092 150.3 208.3245.7 27 30.82 35.34 40.71 47.08 54.67 63.71 74.48 87.35 102.7 121.1 169.4 238.5 283.6 28 32.13 37.05 42.93 49.97 58.40 68.53 80.70 95.34 113.0 1342 190.7 2729 29 33.45 38.79 45.22 52.97 62 32 73.64 87.35 104.0 124.1 148.6 214.6 3121 30 34.78 377.2 40.57 47.58 56.08 66.44 79.06 94.46 113.3 136,3 164.5 241.3 356.8 40 48.80 60.40 75.40 120.8 1548 1996 3379 4426 767.1 1,342 1,779 50 84.46 84 58 1128 152.7 2093 290.3 406.5 5738 815.1 1,164 2,400 4,995 7.218 factor 98.35 327.1 ses or a 95.00 250.1 Factd 10) Print Done contin G Saarch or tune Uni 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.) Payback years Plan A years Plan B Calculate the ARR (accounting rate of return) for both plans. (Round your answers to the nearest tenth percent, X.X%.) ARR % Plan A Plan B % Caculate the NPV (net present value) of each plan. Begin by calculating the NPV of Plan A. (Complete all answer boxes. Enter a "0" for any zero balances sign for a negative not present value.) PV Factor Plan A: Years Net Cash Inflow Annuity PV Factor (1-3%, n=10) Present Value (-8%, 10) 1 - 10 10 Present value of annuity Present value of residual value Total PV of cash inflows 0 Initial Investment Net present value of Plan A Lola Company operates a chain of sandwich shops the icon to view actional information) (Click the icon to view Presente e Ordinary Annuity of State Click the icon to view Future Value of $1 tab) Click the icon to view Future of Oinary Annuity of State) Catch the Complete wil we borstberator any zero balances or amounts that do not apply to the plan. Erterary factor amounts to three decimal places, Xxx Use parentheses or a minuten for at present Net Cash Annuity PV Factor PV Factor Present Years Inbow %10) Value 1 - 10 Present of annuity 10 Present of residuale TPV of cash inhows 0 Net presentate of Plan B Calculate the province of these two plans found to be decimal places XXX Protabatinder Plan Plan B Requirement 2. What are the strengths and weaknesses of these capital budgeting methods? Match them with the strength and weaknesses listed for each of the four capital budgeting models Capital Budgeting Method Strengths/Weaknesses of Capital Budgeting Method is based on cash flows, can be used to profitability and take into account the time value of money has one of the weaknesses of the other models is easy to understand, is based on cashows, and high risks However, it lores praty and the time of money Can be used to me profy, but it ignore the time value of money. It lows us to compare aterrative tente in present a terms and to wccounts for diferences in the investments in cost. It has one of the Choose from any list or enter any number in the input fields and then continue to the next question Calculate the NPV of Plan B. (Complete all answer boxes. Enter a "0" for any zero balances or amounts Plan B : Net Cash Annuity PV Factor (i=8%, n=10) PV Factor (i=8%, n=10) Years Inflow 1 - 10 Present value of annuity 10 Present value of residual value Total PV of cash inflows 0 Initial Investment Net present value of Plan B Calculate the profitability index of these two plans. (Round to two decimal places X.XX.) Plan A Plan B Average amount invested Average annual operating income Requireme Initial investment s of these capital budgeting methods? Match the ti Present value of net cash inflows I for each of the four capital budgeting models. Capital Budgeting Method Strengths/Weaknesses of Capital Budgeting Method is based on cash flows, can be used to assess profitability, and takes into the time value of money. It has none of the weaknesses of the other Is easy to understand, is based on cash flows, and highlights risks. However, it ignores profitability and the time value of money. Can be used to assess profitability, but it ignores the time value of money. It allows us to compare alternative investments in present value terms and accounts for differences in the investments initial cost. It has none of the weaknesses of the other models Choose from any list or enter any number in the input fields and then continue to the next question. 10 Present value of residual value Total PV of cash inflows Initial Investment 0 Net present value of Plan B Calculate the profitability index of these two plans. (Round to two decimal places X.XX.) Profi Plan A Plan B Requirement 2. What are the strengths and weaknesses of these capital budgeting methods? Match the term with the strengths and weaknesses listed for each of the four capital budgeting models. Capital Budgeting Method Strengths/Weaknesses of Capital Budgeting Method w is based on cash flows, can be used to assess profitability, and takes into accoun the time value of money. It has none of the weaknesses of the other models. ARR Is easy to understand, is based on cash flows, and highlights risks. Net prosent value However, it ignores profitability and the time value of money. Payback method Can be used to assess profitability, but it ignores the time value of money. Profitability index It allows us to compare alternative investments in present value terms and it also accounts for differences in the investments initial cost. It has none of the weaknesses of the other models Choose from any list or enter any number in the input fields and then continue to the next question weaknesses of the other models. net present value, and a profitability index Requirement 3. Which expansion plan should Lolas Company choose? Why? Lolas Company should invest in because it has a payback period, a VARR, a Requirement 4. Estimate Plan A's IRR. How does the IRR compare with the company's required rate of return? The IRR (internal rate of return) of Plan A is between This rate the company's hurdle rate of 8%. Choose from any list or enter any number in the input fields and then continue to the next question Is based on cash flows, can be used to assess profitability, an the time value of money. It has none of the weaknesses of Is easy to understand, is based on cash flows, and highlights ris However, it ignores profitability and the time value of money. Can be used to assess profitability, but it ignores the time value It allows us to compare alternative investments in present value to accounts for differ nents' initial cost. It has none 8%-9% weaknesses of the 9%-10% Requirement 3. Which expansion plan should Lolas Why? 10%-12% Lolas Company should invest in because it ! 12%-14% pack period, a ARR, Requirement 4. Estimate Plan A's IRR. How does the 14%-15% the company's required rate of The IRR (internal rate of return) of Plan A is between This rate the company's hurdle rate of 8%. Choose from any list or enter any number in the input fields and then continue to the next