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O'Mally Department Stores is considering two possible expansion plans. One proposal involves opening 5 stores in Indiana at the cost of $1,830,000. Under the other
O'Mally Department Stores is considering two possible expansion plans. One proposal involves opening 5 stores in Indiana at the cost of $1,830,000. Under the other proposal the company would focus on Kentucky and open stores at a cost of $2.700.000. The following information is available Indiana cosa Kentucky Crocs Required investment 51.830 000 $2.700.000 Estimated Ite 9 years Estimated residual value $70,000 360,000 Estimated annual cash Wows over the next 9 years $500,000 300.000 Required rate of return 10% 10% The payback period for the Kentucky proposal is closest to O A 45.00 years OB. 3.00 years. OC. 3.21 years OD 2.93 years
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