Scenario: Opras operates a chain of sandwich shops. The company is considering two possible expansion plans. Plan A would open eight smaller shops at a cost of $8,400,000. Expected annual net cash inflows are $1,500,000, with zero residual value at the end of 10 years. Under Plan B, Leches would open three larger shops at a cost of $8,250,000. This plan is expected to generate net cash inflows of $1,080,000 per year for 10 years, the estimated useful life of the properties. Estimated residual value for Plan B is $1,000,000. Leches uses straight-line depreciation and requires an annual return of 10%.

Please help with the requirements 1-5: All work and calculations must be shown with explanations provided when necessary so I can use for studying. Thank you.

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? Make a table to show these.
3. Estimate Plan A's IRR. How does the IRR compare with the company's required rate of return?
4. Based on the IRR and PV of each plan, which should be chosen? What is Leches required rate of return and how do the findings for each plan fit the requirement?