Question: calculate NPV of each plan.

Caclulate 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 or amounts that do not apply to the plan. Enter any factor amounts to three decimal places, X.XXX. Use parentheses or a minus sign for a negative net present value.) (Click the icon to view Present Value of $1 table.) 3 (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.) Plan A: Years Net Cash Inflow Annuity PV Factor (i=10%, n=10) PV Factor (i=10%, n=10) Present Value 1 - 10 10 Present value of annuity Present value of residual value Total PV of cash inflows Initial Investment 0 Net present value of Plan A Entor a number in the edit fiold and then click Check Anchor A Reference home. & Ske Try St Periods 5% 0.952 0.907 1% 0.990 0.980 0.971 0.961 0.951 0.942 0.864 2% 3% 4% 0.980 0.971 0.962 0.961 0.943 0.925 0.942 0.915 0.889 0.924 0.888 0.855 0.906 0.863 0.822 0.888 | 0.837 0.790 0.871 0.813 0.760 0.853 0.789 0.731 0.837 0.766 0.703 0.820 0.744 0.676 0.804 0.722 | 0.650 0.788 0.701 0.625 0.773 0.681 0.601 0.758 0.661 0.577 0.743 0.642 0.555 0.728 | 0.534 0.714 0.605 0.513 0.700 0.587 | 0.494 0.686 | 0.570 | 0.475 0.673 0.554 0.456 0.660 0.538 0.439 6% 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 0.527 0.497 16% 0.862 0.743 0.641 0.552 0.476 0.410 0.354 0.305 0.263 0.227 OOOOOOOO 0.823 0.784 0.746 0.711 0.677 0.645 0.614 0.585 0.557 0.530 0.505 0.481 0.458 0.436 0.416 Present Value of $1 7% 8% 9% 10% 0.935 0.926 0.917 0.909 0.873 0.8570.842 0.826 0.816 0.794 0.772 0.751 0.763 0.735 0.708 0.683 0.713 0.681 0.650 0.621 0.666 0.630 0.596 0.564 0.623 0.583 0.547 0.513 0.582 0.540 0.502 0.467 0.544 0.500 0.460 0.424 0.508 0.463 0.422 0.386 0.475 0.429 0.350 0.444 0.397 0.356 0.319 0.415 0.368 0.326 0.290 0.388 0.340 0.299 0.263 0.362 0.315 0.275 0.239 0.339 0.292 0.252 0.218 0.317 0.270 0.231 0.198 0.296 0.250 0.212 0.180 0.277 0.232 0.194 0.164 0.258 0.215 0.178 0.149 0.2420.1990.1640.135 0.388 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.163 0.146 0.130 0.116 0.104 0.093 14% 15% 0.877 0.870 0.769 0.756 0.675 0.658 0.592 0.572 0.519 0.497 0.456 | 0.432 0.400 0.376 0.351 0.327 0.308 0.284 0.270 0.247 0.237 0.215 0.208 0.187 0.182 0.163 0.160 0.141 0.140 0.123 0.123 0.107 0.108 0.093 0.095 0.081 0.083 | 0.070 0.073 0.061 0.064 0.053 0.195 18% 20% 0.847 0.833 0.7180.694 0.609 0.579 0.516 0.482 0.437 0.402 0.370 0.335 0.314 0.279 0.266 0.233 0.225 0.194 0.191 0.162 0.162 0.135 0.137 0.112 0.116 0.093 0.099 0.078 0.084 0.065 0.071 0.054 0.060 0.045 0.051 0.038 0.043 0.031 0.037 0.026 0.031 0.022 0.469 m 0.623 0.168 0.145 0.125 0.108 0.093 0.080 0.069 0.060 0.051 0.044 0.442 0.417 0.394 0.371 0.350 0.331 0.312 0.294 c c 828 0.377 0.359 0.811 Print Done 0 Reference Future Value of $1 Periods 3% 1.030 1.061 14% 1.140 1.300 1.482 1.689 1.925 1% 2% 1.010 1.020 1.020 1.040 1.030 1.061 1.041 1.082 1.051 | 1.104 1.062 1.126 1.072 1.149 1.083 1.172 1.094 1.195 1.105 1.219 1.116 1.243 1.127 1.268 1.138 1.294 1.149 1.319 1.161 1.346 1.173 1.373 1.184 1.400 1.196 1.428 1.208 1.457 1.220 1.486 1.232 1.516 2.144 4% 5% 1.040 1.050 1.082 1.103 1.125 1.158 1.170 | 1.216 1.217 1.276 1.265 1.340 1.316 1.407 1.369 1.477 1.423 1.551 1.480 1.629 1.539 1.710 1.601 1.796 1.665 1.886 1.732 1.980 1.801 2.079 1.873 2.183 1.948 2 292 2.026 2407 2.107 2.191 2.653 2279 6% 7% 1.060 1070 1.124 1.145 1.191 1.225 1.2621.311 1.338 1.403 1.419 1.501 1.504 1.606 1.594 1.718 1.689 1.838 1.791 1.967 1.898 2.105 2012 2.252 2. 133 2.410 2 261 2.579 2.397 2.759 2.540 2.952 2693 3. 159 2.854 3.380 8% 1.080 1.166 1.260 1.360 1.469 1.587 1.714 1.851 1.999 2. 159 2 332 2.518 2.720 2937 3.172 3.426 3.700 3.996 4.316 4.661 5.034 1.126 1.159 1.194 1.230 1.267 1.305 1.344 1.384 1.426 1.469 1.513 1.558 1.605 1.653 1.702 1.754 1.806 1.860 9% 10% 1.090 1.100 1.1881.210 1.295 1.331 1.4121.464 1.539 | 1.611 1.677 1.772 1.828 1.949 1.993 2.172 2.358 2 367 2.594 2.580 2.853 2813 3.066 3.452 3.342 3.798 3.642 4.177 3.970 4.595 4.328 5.054 4.717 5.560 5.142 6.116 5.604 6.727 6.109 7.400 15% 1.150 1.323 1.521 1.749 2.011 2.313 2.660 3.059 3.518 4.046 4.652 12% 1.120 | 1.254 1.405 1.574 1.762 1.974 2.211 2476 2.773 3.106 3.479 3.896 4.363 4.887 5.474 6.130 6.866 7.690 8.613 9.646 10.80 3.138 5.350 2.195 2.502 2.853 3.252 3.707 4.226 4.818 5.492 6.261 7.138 8.137 9.276 10.58 12.06 13.74 15.67 7.076 8.137 9.358 10.76 1238 14.23 16.37 18.82 3.026 3.617 3.207 3.400 3.870 4.141 2.786 Print Done Reference Periods 20% 0.833 1% 0.990 1.970 2.941 3.902 1.528 18% 0.847 1.566 2.174 2.690 3.127 2. 106 2.589 2.991 853 Von W 1.795 7.652 Present Value of Ordinary Annuity of $1 2% 3% 4% 5% 6% 7% 8% 9% 10% 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 2.884 2.829 2.775 2.723 2.673 2.624 2.577 | 2.531 2487 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 9.787 9.253 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 10.575 9.954 9.3858.863 8.384 7.943 7.536 7.161 11.348 10.635 9.9869.394 8.853 8.358 7.904 7.487 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 12.849 11.938 11.118 10.380 9.712 9.108 8.559 | 8.061 7.606 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 14.292 13.166 12.166 | 11.274 10.477 9.763 9.122 8.544 8.022 14.992 13.754 12.659 11.690 10.828 10.059 9.3728.756 8.201 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.129 8.514 17.011 15.415 14.029 12.821 11.764 10.836 10.017 9.292 8.649 3.498 3.812 4.078 4.303 4.494 8.566 9.471 10.368 11.255 12.134 13.004 4.031 4.192 12% 14% 0.893 0.877 1.6901.647 2.402 | 2322 3.037 | 2914 3.605 3.433 4.111 3.889 4.564 4.288 4.968 4.639 5.328 4.946 5.650 5.216 5.938 5.453 6.194 5.660 6.424 5.842 6.628 6.002 | 6.811 6.142 6.265 7.120 6.373 7.250 6.467 7.366 6.550 7.4696.623 7.5626.687 15% 16% 0.870 0.862 1.626 1.605 2283 2.246 2.855 2.798 3.352 3.274 3.784 3.685 4.160 4.039 4.487 4.344 4.772 4.607 5.019 4.833 5.234 5.029 5.421 5.197 5.583 5.342 5.724 5.468 5.847 5.575 5.954 5.669 6.047 5.749 6.128 5.818 6.198 5.877 6.259 5.929 6.3125.973 6.814 7.103 4.656 4.793 4.910 5.008 5.092 4.675 6.974 5.162 5.222 5.273 5.316 5.353 5.384 4.730 4.775 4.812 4.844 4.870 4.891 Print Done 0 Reference Periods 1% 2% 1.000 1.000 2010 2020 3.030 3.060 4.060 4.122 5.101 5.204 6.152 6.308 7.214 7.434 8.286 8.583 9.369 | 9.755 10.46 10.95 11.57 12.17 12.68 13.41 13.81 14.68 14.95 15.97 16.10 17.29 17.26 18.64 18.43 20.01 Future Value of Ordinary Annuity of $1 3% 4% 5% 6% 7% 8% 9% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2030 2040 2.050 2.060 2070 2.080 2.090 3.091 3.122 3.153 3.1843.215 3.246 3.278 4.184 4.246 4.310 4.375 4.440 4.506 4.573 5.309 5.416 5.526 5.637 5.751 5.867 5.985 6.468 6.633 6.802 6.975 7.1537.336 7.523 7.662 7.898 8.142 8.394 8.654 8.923 9.200 8.892 9.214 9.549 9.897 10.260 10.64 11.03 10.16 10.58 11.03 11.49 11.98 12.49 13.02 11.46 12.01 12.58 13.18 13.82 14.49 15.19 12.81 13.49 14.21 14.97 15.78 16.65 17.56 14.19 15.03 15.92 16.87 17.89 18.98 20.14 15.62 16.63 17.71 18.88 21.50 22.95 17.09 18.29 19.60 21.02 2421 26.02 18.60 20.02 23.28 25.13 | 27.15 29.36 20.16 | 21.82 23.66 25.67 27.89 30.32 33.00 21.76 23.70 28.21 30.84 33.75 36.97 23.41 25.65 30.91 34.00 37.45 41.30 25.12 27.67 33.76 37.38 | 41.45 46.02 26.87 | 29.78 36.79 41.00 45.76 | 51.16 28.68 31.97 35.72 39.99 44.87 50.42 56.76 10% 1.000 2.100 3.310 4.641 6.105 7.716 9.487 11.44 13.58 15.94 18.53 12% 1.000 2.120 3.374 4.779 6.353 8.115 10.09 12.30 14.78 17.55 20.65 24.13 28.03 32.39 37.28 42.75 48.88 55.75 63.44 72.05 81.70 14% 1.000 2.140 3.440 4.921 6.610 8.536 10.73 13.23 16.09 19.34 | 23.04 27.27 32.09 37.58 43.84 50.98 59.12 68.39 78.97 91.02 104.8 15% 1.000 2.150 3.473 4.993 6.742 8.754 11.07 13.73 16.79 20.30 24.35 21.38 29.00 20.14 22.55 34.35 27.98 21.58 35.95 40.54 28.13 22.84 65.08 75.84 88.21 102.4 118.8 33.07 57.28 24.30 25.78 23.24 64.00 Print Done Requirement 4. Division D is considering two possible expansion plans. Plan A would expand a current product line at a cost of $8,500,000. Expected annual net cash inflows are $1,525,000, with zero residual value at the end of 10 years. Under Plan B, Division D would begin producing a new product at a cost of $8,150,000. This plan is expected to generate net cash inflows of $1,090,000 per year for 10 years, the estimated useful life of the product line. Estimated residual value for Plan B is $1,200,000. Division D uses straight-line depreciation and requires an annual return of 10%. 4a. Compute the payback, the ARR, the NPV, and the profitability index for both plans. Begin by calculating the payback for both plans. (Round your answers to one decimal place, X.X.) Amount invested Expected annual net cash inflow Payback Plan A $ 8,500,000 1,525,000 5.6 years Plan B 8,150,000 1,090,000 7.5 years Calculate the ARR (accounting rate of return) for both plans. (Round your answers to the nearest tenth percent, X.X%.) Average annual operating income 675,000 395,000 ARR 15.9% 1 Plan A Plan B $ $ $ Average amount invested 4,250,000 4,675,000 8.4 % Enter any number in the edit fields and then click Check