This question: 1 point(s) possible Submit quiz Jo Jo Inc. operates a chain of snack shops. The company is considering two possible expansion plans. Plan A would open eight smaller shops at a cost of $8.940,000. Expected annual net cash inflows are $1,650,000 with zero residual value at the end of ten years. Under Plan B. Jo Jo would open three larger shops at a cost of $8.540.000. This plan is expected to generate net cash inflows of $1,300,000 per year for ten years, the estimated life of the properties. Estimated residual value is $975,000 Jo Jo uses straight-line depreciation and requires an annual return of 6%. Requirement 1. Compute 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) Now compute the ARR (accounting rate of return) for both plans. (Round the percentages to the nearest tenth percent.) Plan A Plan B SE Next compute the NPV (net present value) under each plan. Begin with Plan A, then compute Plan B. (Round your answers to the nearest whole dollar and use parentheses or a minus sign to represent a negative NPV) Net present value of Plan A Net present value of Plan B Match the term with the strengths and weaknesses listed for each of the three capital budgeting models Strengths and weaknesses Is based on cash flows, can be used to assess profitability, and takes into account the time value of money. It has none of the weaknesses of the other two models. Is easy to understand, is based on cash flows, and highlights risks. However, it ignores profitability and the time value of money. Can be used to assess profitability, but it ignores the time value of money Requirement 2. Which expansion plan should Jo Jo choose? Why? Capital budgeting models O 46F Activate Windows Time Remaining: 00.39 19 Next ENG 11:19 PM 4/24/2022