O'Mally Department Stores is considering two possible expansion plans. One proposal involves opening 5 stores in Indiana at the cost of $1,970,000. Under the other proposal, the company would focus on Kentucky and open 6 stores at a cost of $2,800,000. The following information is available: Indiana proposal Kentucky proposal Required investment $1,970,000 $2,800,000 Estimated life 8 years 8 years Estimated residual life $50,000 $40,000 Estimated annual cash inflows over the next 8 years $700,000 $800,000 Required rate of return 12% 12% The net present value of the Kentucky proposal is closest to: (Click the icon to view the present value of $1 table.) O A. $1,190,560. O B. $3,990,560. O c. $1,174,400. OD. $1,158,240. i X - Data Table Present Value of $1 Periods 7 8% 8 9 6% 0.665 0.627 0.592 0.558 0.527 0.497 0.583 0.540 0.500 0.463 0.429 0.397 10% 0.513 0.467 0.424 0.386 0.350 0.319 12% 0.452 0.404 0.361 0.322 0.287 0.257 10 11 12 Print Done i 1 Data Table Present Value of Annuity of $1 Periods 6% 7 5.582 8 6.210 9 6.802 10 7.360 11 7.887 12 8.384 8% 5.206 5.747 6.247 6.710 7.139 7.536 10% 4.868 5.335 5.759 6.145 6,495 6.814 12% 4.564 4.968 5.328 5.650 5.938 6.194 Print Done