Requirement 1. Compute the payback, the ARR, the NPV, and the profitability index of these two plans. - X Requirements Calculate the payback for both plans. (Round your answers to one decimal place, X.X.) = Payback Plan A = years Plan B years Calculate the ARR (accounting rate of return) for both plans. (Round your answers to the nearest tenth percent, X.X%.) = ARR 1. Compute the payback, the ARR, the NPV, and the profitability index of these two plans. 2. What are the strengths and weaknesses of these capital budgeting methods? 3. Which expansion plan should Locos Company choose? Why? 4. Estimate Plan A's IRR. How does the IRR compare with the company's required rate of return? Plan A % % Plan B int Print Done Caclulate the NPV (net present value) of each plan. Begin by calculating the NPV of Plan A. (Complete all answer boxes. E Annuity PV Plan A: Net Cash Factor PV Factor Present Years Inflow (i=9%, n=10) (i=9%, n=10) Value 1 - 10 Present value of annuity Present value of residual 10 value Total PV of cash inflows - X More Info 0 Initial Investment Net present value of Plan A par Calculate the NPV of Plan B. (Complete all answer boxes. Enter a "0" for any zero balances or amounts that do not apply Annuity PV Plan B: Net Cash Factor PV Factor Present Years Inflow (i=9%, n=10) (i=9%, n=10) Value 1-10 Present value of annuity Present value of residual 10 value Total PV of cash inflows 0 Initial Investment Net present value of Plan B The company is considering two possible expansion plans. Plan A would open eight smaller shops at a cost of $8,440,000. Expected annual net cash inflows are $1,525,000 for 10 years, with zero residual value at the end of 10 years. Under Plan B, Locos Company would open three larger shops at a cost of $8,250,000. This plan is expected to generate net cash inflows of $1,070,000 per year for 10 years, the estimated useful life of the properties Estimated residual value for Plan B is $1,200,000. Locos Company uses straight-line depreciation and requires an annual return of 9%. Print Done Calculate the profitability index of these two plans. (Round to two decimal places X.XX.) Profitability index + 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 Choose from any list or enter any number in the input fields and then continue to the next