Scribbles Inc. operates a chain of coffee shops. The company is considering two possible expansion plans. Plan A would open eight smaller shops at a cost of $8,440,000. Expected annual net cash inflows are $1,400,000 with zero residual value at the end of ten years. Under Plan B, Scribbles would open three larger shops at a cost of $8,340,000. This plan is expected to generate net cash inflows of $1,200,000 per year for ten years, the estimated life of the properties. Estimated residual value is $1,075,000. Scribbles uses straight-line depreciation and requires an annual return of 8%. Required:
a. Compute the payback period, the ARR, and the NPV of these two plans. What are the strengths and weaknesses of these capital budgeting models?
b. Which expansion plan should Scribbles choose? Why?
c. Estimate Plan A’s IRR. How does the IRR compare with the company’s required rate of return?

Use this image to answer the following question. when the economy is operating at point b, the us congress is most likely to follow

Lavage rapide is a canadian company that owns and operates a large automatic car wash facility near montreal. the following table provides data concerning the company’s costs: fixed cost per month cost per car washed cleaning supplies $ 0.70 electricity $ 1,400 $ 0.07 maintenance $ 0.15 wages and salaries $ 4,900 $ 0.30 depreciation $ 8,300 rent $ 1,900 administrative expenses $ 1,400 $ 0.03 for example, electricity costs are $1,400 per month plus $0.07 per car washed. the company expects to wash 8,000 cars in august and to collect an average of $6.50 per car washed. the actual operating results for august appear below. lavage rapide income statement for the month ended august 31 actual cars washed 8,100 revenue $ 54,100 expenses: cleaning supplies 6,100 electricity 1,930 maintenance 1,440 wages and salaries 7,660 depreciation 8,300 rent 2,100 administrative expenses 1,540 total expense 29,070 net operating income $ 25,030 required: calculate the company's revenue and spending variances for august.

Which of the following statements is correct? a major disadvantage of a partnership relative to a corporation is the fact that federal income taxes must be paid by the partners rather than by the firm itself. in a typical partnership, liability for other partners’ misdeeds is limited to the amount of a particular partner’s investment in the business.true in a limited partnership, the limited partners have voting control, while the general partner has operating control over the business, and the limited partners are individually responsible, on a pro rata basis, for the firm’s debts in the event of bankruptcy. partnerships have more difficulty attracting large amounts of capital than corporations because of such factors as unlimited liability, the need to reorganize when a partner dies, and the illiquidity of partnership interests.