Save Homework: Chapter 12 Homework (GRADED) O Part 1 of 8 Question 9 Score: 0 of 5 points Java Joe Inc operates a chain of doughnut shops. The company is considering two possible expansion plans. Plan A would open oight smaller shops at a cost of $8.940.000 Expected annual net cash inflows are $1.800,000 with zero residual value at the end of ten years. Under Plan B, Java Joo would open three larger shops at a cost of $8,840,000. This plan is expected to generato net cash inflows of $1,100,000 per year for ten years, the estimated life of the properties. Estimated residual value is $975,000 Java Joe uses straight-line depreciation and requires an annual return of 6% (Click the icon to view the present value annuity factor table.) (Click the icon to view the prosent value factor fable.) (Click the icon to view the future value annuity factor table) (Click the icon to view the future value factor table.) Read the requirements Requirement 1. Computo the payback period, the ARR, and the NPV of these two plans. What are the strengths and weaknesses of these capital budgeting models? Begin by computing the payback period for both plans. (Round your answers to one decimal place.) Plan A in years) Plan B (in years) Reference Present Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% Period 10.990 0.980 0,971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 Period 21.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.6901.647 1.605 1.566 Period 3 2.9412.884 2.829 2.775 2.723 2.673 2.577 2.487 2.4022.322 2.246 2.174 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2.798 2.690 Period 5 4.853 4.713 4,580 4.452 4.329 4.2123.993 3.791 3.605 3.433 3.274 3.127 Period 6 5.795 5.601 5.417 5.2425.076 4.917 4.623 4.355 4.111 3.889 3.685 3.498 Period 7 | 6.728 6.472 6.230 6.0025.786 5.5825.206.4.8684,564 4.288 4.0393.812 Period 87.652 7.325 7,020 6.733 6.463 6.210 5.7475.335 4.968 4.639 4.344 4.078 Period 98.5668.1627.786 7.435 7.108 6.8026.247 5.759 5.328 4.9464.607 4.303 Period 9.471 8.983 | 8.530 8.111 7.7227.360 6.710 6.145 5.6505.216 4.833 4.494 10 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 Period 11 10.368 9.787 9.2538.760 8.3067.887 7.139 6.495 5.938 5.453 | 5.029 4.656 4.327 Period 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 6.194 5.660 5.1974.793 4.439 12 Period 12.13411.348 10.635 9.986 9.394 8.8537.904 7.103 6.424 5.842 5.342 4.910 4,533 13 Period 13.004 12.106 11.29610.563 9.899 9.295 8.244 7.367 6,628 6.0025.468 5.008 4.611 14 Period 13.865 12.849|11.938 11.118 10.380 9.712 8.559 7.606 6.811 6.142 5.575 5.092 4.675 15 Period 18.046 16.35114.877 13.590 12.462 11.470 9.818 8.514 7.469 6,623 5.929 5.353 4.870 20 Period 22.023 19.523 17.41315.622 14.09412.783 10.675 9.077 7.843 6.8736.097 5.467 4.948 25 Period 25.808 22.396 19,600 17.292 15.372 13.765 11.258 9.4278.055 7.0036.177 5.517 4.979 30 Period 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.7798.244 7.1056.233 5.548 4.997 40 Print Done