Problem 11 Simply Chocolate Company is considering two possible expansion plans. Proposal X involves opening five stores in North Carolina at a cost of $2,400,000. Under Proposal Y, the company would focus on Virginia and open six stores at a cost of $3,000,000. The following information is given for the two proposals: Proposal X Proposal Y Required investment $2,400,000 $3,000,000 Estimated life 10 years 10 years Estimated residual value $200,000 $200,000 Estimated annual net cash flows $450,000 $580,000 Required rate of return 14% 14% 1) For each proposal compute: A) payback period B) net present value 2) Indicate which proposal is the better investment and why