Make sure it's correct, please!

Period 16% 0.862 Present Value of Annuity of $1 6% 8% 10% 12% 14% 0.943 0.926 0.909 0.893 0.877 1.833 1.783 1.736 1.690 1.647 2.673 2.577 2.487 2.402 2.322 3.465 3.312 3.170 3.037 2.914 4.212 3.993 3.791 3.605 3.433 4.917 4.623 4.355 4.111 3.889 5.582 5.206 4.868 4.564 4.288 6.210 5.747 5.335 4.968 4.639 6.802 6.247 5.759 5.328 4.946 7.360 6.710 6.145 5.650 5.216 1.605 2.246 2.798 3.274 3.685 4.039 4.344 4.607 4.833 Period 6% - 0.943 0 0.890 0 0.840 A 0.792 Present Value of $1 8% 10% 12% 0.926 0.909 0.893 0.857 0.826 0.797 0.794 0.751 0.712 0.735 0.683 0.636 0.681 0.621 0.567 0.630 0.564 0.507 0.583 0.513 0.452 0.540 0.467 0.404 0.500 0.424 0.361 0.463 0.386 0.322 o 0.747 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270 16% 0.862 0.743 0.641 0.552 0.476 0.410 0.354 0.305 0.263 0.227 o 0.705 0.665 x o 0.627 o 0.592 o 0.558 2.060 4.921 Future Value of Annuity of $1 Period 6% 8% 10% 12% 14% 16% 1.000 1.000 1.000 1.000 1.000 1.000 2.080 2.100 2.120 2.140 2.160 3.184 3.246 3.310 3.374 3.440 3.506 4.375 4.506 4.641 4.779 5.066 5.637 5.86 6.105 6.353 6.610 6.877 6.975 7.336 7.716 8.115 8.536 8.977 8.394 8.923 9.487 10.089 10.730 11.414 9.897 10.637 11.436 12.300 13.233 14.240 | 11.491 | 12.488 13.579 14.776 | 16.085 | 17.519 13.181 14.487 15.937 17.549 19.337 21.321 Future Value of $1 Period 6% 8% 12% 1.120 + 1.060 1.080 10% 1.100 1.210 1.331 14% 1.140 1.300 1.124 N 1.166 1.254 16% 1.160 1.346 1.561 1.811 2.100 1.191 1.260 1.405 1.482 W 1.262 1.360 1.464 1.574 1.689 A 1.338 1.469 1.611 1.762 1.925 0 0 1.419 1.587 1.974 2.195 1.504 1.714 1.772 1.949 2.144 2.211 2.502 0 1.594 1.851 2.476 2.853 2.436 2.826 3.278 3.803 4.411 0 1.689 2.358 2.773 1.999 2.159 3.252 3.707 1.791 2.594 3.106 Karvers operates a chain of sub shops. The company is considering two possible expansion plans. Plan A would open eight smaller shops at a cost of $8,740,000. Expected annual net cash inflows are $1,600,000 with zero residual value at the end of 10 years. Under Plan B, Karvers would open three larger shops at a cost of $8,340,000. This plan is expected to generate net cash inflows of $1,050,000 per year for 10 years, the estimated life of the properties. Estimated residual value is $900,000. Karvers uses straight-line depreciation and requires an annual return of 8%. (Click the icon to view the present value annuity factor table.) BE: (Click the icon to view the present value factor table.) (Click the icon to view the future value annuity factor table.) Click the icon to view the future value factor table.) Requirements 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? 2. Which expansion plan should Karvers choose? Why? 3. Estimate Plan A's IRR. How does the IRR compare with the company's required rate of return? 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 L Plan B years years Now compute the ARR (accounting rate of return) for both plans. (Round the percentages to the nearest tenth percent.) Plan A Plan B % 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. 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 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 Karvers choose? Why? Recommendation: Invest in V. It has the | V net present value. It also has a V payback period. Requirement 3. Estimate Plan A's IRR. How does the IRR compare with the company's required rate of return? Compare the IRR with the company's required rate of return. The IRR (internal rate of return) of Plan A is between