X More info The company is considering two possible expansion plans. Plan A would open eight smaller shops at a cost of $8.410.000. 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, Lolas Company would open three larger shops at a cost of $8 100,000 This plan is expected to generate net cash inflows of $1,000,000 per year for 10 years, the estimated useful life of the properties. Estimated residual value for Plan B is $1,300.000. Lolas Company uses straight-line depreciation and requires an annual return of 9% noun ES Pi Print Done Requirement 1. Compute the payback, the Athu NPV, and the probindex of two plan Calculate the payback for both plans, Round your answer to one di pace XX) Plan Plan Payback years Calculate the ARR (accounting rate of or bulan (Round your answer to the percent XX ARA Plan A Pas - Cuculate the NPV inat present value at each plan begin by calling NPV PA Combos Embouts on the plan or any comme Plan A Net Cash Any PV Factor PV Factor Present Years Inillow 10%-109 0-100 1 - 10 resant value of annuity 10 Present of residual value Total PV of cash intlows 0 Inna Investment Net present of Plan A Calculate the NPV of Plant Complete all to Enter for any of our plan de came to the collac Xxx hocam Neth mit Foto Por Present CNP Party Net Cash AV Praca Pre Ye 10 V 1 Patch Calculate the people XXX Plan Reg. What the two Maldi them with the chofth Roupage Capital Bang Strength of Cardin Med abbas whethem can be Tel. When the app Match with the need to the touch budgeting Caing Method Se Wake of Capeting Method schilly and the these constant based on changes prava Como Seminte Sot nu with vinta ment. We company do Compare the in pred porod WA REPAIRR Mother The Pas Tha the commande 12% Present Value of $1 Periods 1% 2% 3% 4% 5% 696 7% 8% 9% 10% 14% 15% 16% 18% 20% Period 1 0.990 0.9800.971 0.962 0.952 0.943 0.935 0.926 0917 0.9090.893 0.877 0.870 0.862 0.847 0.833 Period 2 0.9800.961 0.943 0.925 0.9070890 0.873 0.857 0.842 0.825 0.797 0.769 0.756 0.743 0.7180.694 Period 3 0.971 0.942 0915 0.889 0.864 0.840 0816 0.794 0.772 0.751 0.712 0.675 0.658 0.641 0.6090.579 Period 4 0.961 0.924 0.888 0855 0.823 0.792 0.763 0.735 0.708 0.683 0.636 0.5920.572 0.552 05160482 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.567 0.519 0497 0.4760.437 0.402 Period 6 0.942 0.888 0.8370790 0.746 0.705 0666 0.630 0.5960564 0.507 0.456 0.432 0.4100370 0.335 Period 7 0.933 0.871 0.313 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.452 0.400 0.376 0.354 0314 0.279 Period 8 0.923 0.853 0.789 0.731 0.677 0.627 0592 0.540 0.502 0.467 0.404 | 0.3510327 0.305 0.266 0.233 Period 9 0.914 0.837 0.766 0.703 0.645 0.592 0544 500 0.460 0.424 0.361 0.308 0 284 0.263 0.225 0.194 Period 10 0.905 0.820 0.744 0.676 | 0.614 0.558 0508 0463 0.422 0.386 0.322 0.270 0.247 0.227 0.1910 162 Period 11 08960804 0722 0.650 0.585 0.527 0.475 0.429 0 3880.350 0.287 0.237 0.215 0.1950.1620135 Period 12 0.887 0.788 0.701062 0.557 0.497 0.444 0.397 0.356 0.319 0.267 02080187 0.168 0.137 0.112 Period 13 0.879 0.773 0,681 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.229 0.182 0.163 0.145 0.116 0.093 Period 14 10.8700.758 0.661 0,5770.505 0442 0.388 0340 0.299 0.263 0.205 0.160 0.141 0.125 0.099 0.078 Period 15 0.8610743 0.642 06560481 0.4170382 03150275 0.239 0.183 0.140 01230108 0.0840066 Period 16 10.853 0.728 0.623 0.5340458 0.394 0,339 0.292 0.252 0218 0.163 0.123 0.107 10.093 0.071 0.054 Period 17 0344 0.714 0.605 05130436 0.371 0.317 0.270 10.231 0.198 0 146 0 108 0.093 0.080.10.060 | 0 045 Period 18 0.836 0.700 0.587 0.494 0.416.10.350 0296 0.250 0212 0.1800.130 0.095 0.081 | 0.0690.0510.038 Period 19 0.828 0 686 0.5700475 0.396 0.331 0.277 0232 0.194 0.164 0.116 0.093 0.070 0.060 | 0.0430031 Period 20 0.8200 673 0.554 0.456 0.377 10 312 0.258 0.215 0.178 0.149 0.1040.073 0.061 0.051 0.037 0.026 Period 21 0,8110.660 0538 0439 0.359 0.294 0.242 0.199 0.164 0.136 0.093 0.064 0.053 0.044 0.031 0.022 Period 22 0.8030617 0.5220422 0.342 0278 0.226 0.184 0.15001230.083 0.056 0.046 0.0380028 0.018 Period 23 10.795 0.634 0 50704060.3260.262 0.211 0.1700138 0.112 0.074 0.049 0.040 0.033 0.022 0.015 Period 24 10.788 0.622 0492 0.390 0.310 0.247 0.197 0.158 0.125 0.1020.066 0.043 0.035 0.028 0.019 0.013 Period 25 10.780 0.6100478 0.375 0.295 0233 0.184 0.146 10.116 0,092 0.0590.038 0.030 0.0240016 0.010 Period 26 0.772 0.598 0.464 0.361 0.281 0,220 0.172 0.135 0.106 0.084 0.053 0.033 0,0260 021 0.014 0.009 Period 27 0.764 0.586 | 0.450 | 0.347 0.268 0.207 0.161 0.125 0.09800760 D47 0.029 0.023 0.019 0.0110.007 Period 28 0.767 0.674 0437 0,333 0.265 0.1950 150 0.116 0.090 0.069 0,042 0025 0.0200016 0.0100005 Period 29 0.7490.563 10:424 10.3210 243 0.185 0.141 0.107 0,082 0.063 0.037 0.022 0.0120.014 0.008 0.005 Period 30 0.742 05620412 10 308 0.23 0.174 0131 0.099 0.075 0.057 10 033 0.0200.0160.0120.007 0.004 Period 40 0.672 0.453 0.307 0.208 0.142 0.097 0.067 0.046 0032 0.022 0,011 0.005 0.004 0.003 0.001 0.001 Period 50 10.608 0.372 022801410.087 0.054 0.034 0.021 0.0130.0090003 0.001 0.001 0.001 rence Present Value of Ordinary Annuity of $1 Periods 1% 295 3% 4% 5% 6% 79 8% 9% 10% 12% 14% 15% 16% 18% 20% Period 1 0.990 0.980 0.971 0.962 0.952 0943 09350 926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 Period 2 1970 1942 1.913 1 886 1859 1.8331.808 1.783 1759 1736 1690 1647 1626 1605 1666 1528 Period 3 2941 2.884 2.829 2775 2.723 2673 2624 2577 2531 2487 2402 2.322 2283 2.246 2.174 2.106 Period 4 3.902 3.808 3.717 3.630 3.546 3.4663,387 3312 3240 3.170 3.037 2914 2856 2798 2690 2589 Period 5 4.8534.713 4.580 4.452 4.329 4212 4.100 3.9933.890 3.791.3.605 3.433 3.352 3274 3.127 2.991 Period 6 5.795 5501 5417 5.242 607649174767 4623 4.485 4.355 4111 3.889 3.784 3.685 0.498 3.326 Period 7 6.728 6.472 6.230 6.002 5.786 5.5825.389 5206 5.033 4.868 4.564 4.288 4.160 40393812 3.605 Period 8 7.6527325 7020 6.733 6.4636.210 | 5.971 6.747 5.535 5335 4.968 4,6394487 4344 4.078 3.837 Period 9 8.566 8.162 7.786 7.4357.108 6.802 6.515 6.247 5.9955.759 6.328 4.946 4.772 4.607 43034031 Period 10 9,471 8 983 8.530 8 111 7.722 7.360 70246.710 6.4186.145 5.650 5216 5019 4.833 4 494 1 4 192 Period 11 10 368 9.787 9.253 8.760 8.3067887 7:499.7 1396 806 6.496 5.9385.463 5.234 5.029 4656 4327 Period 12 11.255 10.575 9.954 9.385 8.8638.384 7943 75367.161 6.814 6.1945.680 5421 5.197 4.793 4/439 Period 13 12.134 11 348 10 635 0986 9.394 8.853 8.358 7.90474877 103 6.424 6.842 5,583 5.342 4910 4533 Period 14 13.004 12 108 11296 10.563 9.899 9.295 8.745 8.24477367 367 6.628 6.002 5.724 5.468 5.008 4.611 Period 15 13.866.12.849 11.938 11.118 10.3809712) 9.108 8.56980617.606 6.811: 6.142 5.847 5.575 6.092 14.675 Period 16 14.718 13.578 12.561 11.652 10.838 10.106 94478851 8.313 7.824 6.974 6265 5.954 5.669 5.162 4.730 Period 17 16.562 14.292 13.166 12.166 1127410 477 9.763 9.122 8.5448.022 74120 6.373 6.047 6.749 5.222 4.775 Period 18 16.898 14.992 13.754 12.65911.690 10.828 10.069 9.3728.756 8.201 7.250 6:467 6.128 5.818 5.2734812 Period 19 17.226 15.678 14 324 13. 134 12.085 11,16810.336 9.804 8.950 8.365 1 7368 6550 6.198 5877 5316 4844 Period 20 18.046 16.351 | 14.877 13,590 1246211470 10 594 9818 9:129 8614 74696.623 6.259 5.929 5.353 4.870 Period 21 18.857 17 01115415 14.029 12.821 11.764 10.836 10.0179.292 8649 7.562 6.687 6.312 5.978 5.384 4.891 Period 22 19.660 17.658 15.937 14.451 13.163 12.042 11.061 10.2019.4428.772 7 645 16.743 6.359 6.011 5.410 4.909 Period 23 20.456 18.292 16.444 14857 13.489 12.303 11 272 10.371 9.580 8883 7.718 6.792 8.399 6,044 6.432 4.925 Period 24 21 24318.914 16,936 15.247 13.799 12.560 11 469 10.529 9.7078.985 7.7846835 8434 6073 5.451 4937 Period 25 22.023 19.523 17.41315.622 14.094 12783 11.654 10.675 98239.077 | 7843 6.873 6484 6.097 5.467 4948 Period 26 22.796 20.12117.877 | 15.983 14.375 13.003 11 828 10.810 1 9929 9.161 7.896 | 6.906 6.491 16.118 5.480 4.1956 Period 27 23.560 20.707 18.327 16,330 14.643 13 211 11987 10.935 10.027 9237 7.94361935 6,514 6:136 5492 4964 Period 28 24 316 2128118.764 16.663 14.898 13 406 12.137 11051 10.116 9.307 7.984 6.96) 6.534 6 152 5502 4970 Period 29 25 066 21 844 | 19.188 16.984 15.141 13.591 12 278 11:158 |10.198 9370 8.0226983 6.551 6.186 5.510 4.975 Period 30 25 808 22 396 19.600 17 292 15.372 13.765 1240911 258 10.274 9 427 8,0667003 6.568 6.1776.517 4.979 Period 40 32 835 27/355 23 115 19.793 17 159 15 046 13 332 11925 10.757 9779 | 8.244 7105 6.642 6233 5.548 4997 Period 50 39.196 3142425.730 21.482 18.256 15 762 13 801 12.233 10.962 9916 8 304 7.133 6.661 5246 5.554 4.999 Print Done eference Future Value of $1 19 Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 1% 2% 3% 4 5% 6% 7% 8% 9% 10% 12% 14% 15% 1.010 1.020 1.030 1040 1.050 1.050 1070 1.080 1.090 1.100 1.120 1.140 1.150 1.020 1.040 1,061 1082 1103 1.124 1145 1.166 1188 1.210 1 254 1.300 1.323 1030 1061 1.093 1.125 1.158 1.191 1225 1.250 1295 1331 1.405 1482 1521 1.041 1.08211126 1.70 1.2.16 1262 1311 1.350 1412 1464 1574 1.689 1.749 1.051 1104 1.159 1217 1276 1338 1403 1469 1 539 1611 1762 1.925 2011 1062 1.126 1.194 1.265 1340 1.4191.501 1587 1.6771.772 1974 2.195 2 313 1.0721149 1 230 1 316 1407150416061.7141.828 1.949 2211 2502 2660 1083 1472 126713691.47715941718 18511 9932144 2476 2.853 3.059 1094 1.195 1.305 1423 1.55 1.689 1.838 1999 2172 2.358 27733.252 3.518 1.105 1.219 1.344 1480 1629 1793 1.967 2.159 236725943.106 3.707 4.046 1.116 1.243 1384 1.639 1710 1.898 2105 2332 25802853 3.4794.226 4652 1127 1.268 1428 1.600 1.796 2012 2.252 2518 2813 3.138 3896 4818 5350 11138 1.294 14691666 1.886 2133 2410 2720 3.066 3.452 43535492 6.153 1,149 1.319 1.513 1.732 1980 2251 2.579 29373342 3.79 4.8876.2617076 1.161 1.346 1.558 18012079 2397 2759 3.172 3.642 4.177 5.4747.138 8.137 Period 11 Period 12 Period 13 Period 14 Period 15 Period 16 Period 17 Period 18 Period 19 Period 20 Period 21 Period 22 Period 23 Period 24 Period 25 Period 26 Period 27 Period 28 Period 29 Period 30 1.173 1.373 1 605 1873 2.183 2540 2.952 3.426 3970 4596 6.130 8.137 9.358 1.184 1.400 1.653 1948 2292 2693 3.169 3.700 4328 5.054 6.866 9.276 10.76 1.196 1.428 1.7022.026 2407 28543.380 3.99847175.560 7890 10.58 12.38 11208 1.457 1.754 2 107 2.527 3.026 3.617 43165.1426.116 8,51312061423 1.220 1.486 1.806 2.1912.653 3.2073,870 46615604 6727 9.646 3.74 16:37 1232 1516 1.8502 279 2786 3.40041415.034 6. 1097.400 10.80 15.67 18.82 1245 1.546 1.916 2.370 2925 3.604 4.430 5.437 6659 8.140 12.10 17.86 21.64 1.257 1.5771.9742.465 3,072 3.82014741 5.87172588954 13.55 20 36 24 89 1270 1608 2.0332563 3.225 4.049 5072 6.341 79119850 15.18 23.21 2863 1.282 1641 2.0942666 3.386 4 292 5427 6 848 8.623 10.83 17.00 26.46 3292 1.295 1.673 2.1572772 3.556 4.549 5.807 7396 9,399 1192 19.043017 37:86 1308 1.707 2.2212 883 3.733 4.8226.2147.983 10 25 13.11 21 32 34 39 43 54 1321 1.741 2.288 2.999 3.920 5112 6.649 627 11:17 14 42 23.89 39.20 50.07 1335 1.776 23572119 4.115 5418 7.114 9317 12 17 15 88 28.75 44 69 57 58 1348 1 811 2.4273 243 4.3225743 7.612 10.05 13.27 1745 29.96 50.9566 21 1.489 2.208 3,262 4.801 7040 10 29 14 972172314145 28 93.05 188.9 2579 1 645 2692 4 384 71071147 18.42 29 46 46.907436 1174 289.0 700 2 1094 Period 40 Period 50 Print Done erence 3% Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Perlod 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 Future Value of Ordinary Annuity of S1 1% 296 4% 5% 6% 79 89 9% 109 12% 14% 15% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1000 1000 2010 2020 2030 2040 2050 2050 2070 2080 2090 2.100 2.1202140 2 150 3030 3.060 3.091 3.122 3153 3.184 3215 3.246 3278 3.310 3.374 3.4403473 14.0604122 4.1844 245 4310 4.375 4440 4.506 4573 4641 4779 49214993 5.101 52045 309 5.416 5,526 5637 5.751 5867 5.985 6.105 6.353 6610 6.742 6.152 6.308 6.468 6.633 6 802 6.975 7.153 7.336 7.523 7716 8.1158 535 8.754 7121474347.662 7.89B 8.142 8.394 B6548.9239.2009.487 10.09 10.73 1107 8.286 8583 8.89292149.549 97 10.260 10.64 1103 11.44 1230 13.23 13.73 9.359 9.755 10.16 10.58 11.03 1149 11.99 12.49 13.02 13.5814.78 16.09 16.79 10.46 10 95 11.46 12.01 12.58 13.18 13.82 14.49 15 19 15 94 1755 19.34 20.30 11.57 12:17 12 81 13.49 1421 1497 15.78 16,65 1756 18.53 20 65 23.04 24 35 12.68 13:41 14.19 15.03 15.92 16.87 17 89 18.98 20.14 2138 24.13 272729.00 13.81 14.88 15,62 1653 1771 18.88 20.14 2150 22.95 24 52 28.03 32.09 34 35 14.95 15.97 17.09 18.29 19.50 21.02 2256 24 2126.02 2798 3239 37 58 40 50 16.10 17.29 18.60 20.02 21.58 23 28 25.13 2715 29.36 31.77 3728 43.84 47.58 17 26 18.64 20.16 21.12 23.66 25.67 27 89 30 32 33.00 35.96 42.75 50.98 5572 18.43 20.01 2178 23,70 25,842821 30 84 33.75 36.97 405448.88 59.12 65.08 19.61 21.41 23.41 2565 28.13 2091 34.00 37.45 41.30 45 50 55.75 68.39 75.84 20.81 22.84 25.12 27.87 30,54 33.76 37 38 41 45 46.02 51.16 53.4478.978821 22.02 24 30 26.87 29.78 33.07 36.79 41 00 45.76 51 15 5728 72.05 91.02 1024 23.2425.78 28 68 31.9735.72 39.99 44 87 50.42 56,76 54.00 817010481188 24.47 27 30 30.5434 2538,51 43.3949 01 55 46 62.87 71.40 9250 120 4 1376 25.72 28.85 3245 35 52 4143 47.00 53.4460.89 69.5379541046 138 31593 26.97 30 42 34 43 39.08 4450 50.82 58.18 66.76 75.79 38 50118-2 15871842 28.24 32.03 36 46 41.55 4773 54 86 53 25 78.11 84.70 9835 1333 181.92128 29.53 33.57 38.55 44 31 51.11 59.16 68.58 79.95 93.32 109 2150 3 2083 2457 3082 35 34 40.71 4708 54 57 63 71 74 48 87 35 102.7 12111594238.5 283.6 32.13 37.05 4293 49.97 58.40 58.53 8070 35 34 1130 1342 190.7 2729 3271 33.45 3970 45.22 52.97 6232 73,64 87 35 1040 124148621463121 3772 3478. 40.57 47.58 58.08 66.44 79.06 54.46 11331363 1645 2413 356 8 1347 48.8960407540 9503 120.8 154.8 199.6 259.1 3379 4425 757.1 1342 779 64468458 1128 1527 2093 290.34065 573 88151 1154 2400 49957218 Period 16 Period 17 Period 18 Period 19 Period 20 Period 21 Period 22 Period 23 Period 24 Period 25 Period 26 Period 27 Period 28 Period 29 Period 30 Period 40 Period 50 Print Done Requirement 1. Compute the payback, the ARR the NPV and the profitability index of these two plans. Calculate the payback for both plans (Round your answers to one decimal place XX.) Amount invested Expected annual net cash inflow Plan A Payback years Plan B years Calculate the ARR (accounting rate of return) for both plans. (Round your answers to the nearest tenth percent, XX%) Average annual operating income Average amount invested Plan A ARR III 96 Plan B 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 ze Net Cash Present Annuity PV Factor (-9%, n=10) PV Factor (1-9%, 0-10) Inflow Value Plan A: Years 1 - 10 Present value of annuity 10 Present value of residual value Total PV of cash inflows 0 Initial Investment Net present value of Plan A Calculate the NPV of Plan B Complute all aniwer boxes Enter a to" for any zoro balances or amounts that do not apply to the plan Enterpany factor amounts to three decimal Plan B: Net Cash Annuity PV Factor PV Factor Present Years Inflow (-9% -10) (1940-10) Value 1-10 Present value of annulty 10 Prosent value of residual value Total PV of cash inflows 0 Initial Investment Net present value of Plan B Calculate the profitability Index of these two plans (Round to two decimal places XXX Calculate the profitability Index of these two plans (Round to two decimal places XXX) Profitability Index Plan Plan B Requirement 2. What are the strengths and weakness of these capital budgeting methodu? Match the form with the strengths and weaknesses listed for each of the four capital budgeting models Capital Budgeting Method Strengths/Weaknesses of Capital Budgeting Method Not present Value is based on cash flows can be used to assess profitability, and tolkes into account the time value of money than one of the weaknesses of the other models Payback method is way to understand is based on cash flows and highlightiku However, it ignore profitability and the time value of money ARR Can be used to profitability, but ignore the value of ney Profitability Index It allows us to compare alternative investments in present value and its accounts for differences in the investments initial cost it has one of the weaknesses of the other models Requirement 3. Which expansion plan should Lolas Company choose? Why? Listas Company should invest in because it has a payback period, VARR not present value and a Requirement 4. Estimate Plan A's IRR How does the compare with the company's required rate of retur? profitability Indes The Ramal rate of retum) of Plan Als between Thirat the company's hudio root 99