O'Mally Department Stores is considering two possible expansion plans. One proposal involves opening...
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O'Mally Department Stores is considering two possible expansion plans. One proposal involves opening 5 stores in Indiana at the cost of $1,890,000. Under the other proposal, the company would focus on Kentucky and open 6 stores at a cost of $2,500,000. The following information is available: Indiana proposal Kentucky_proposal Required investment $1,890,000 $2,500,000 Estimated life 5 years 5 years Estimated residual value $50,000 $40,000 Estimated annual cash inflows over the next 10 years $700,000 $900,000 Required rate of return 15% 15% The accounting rate of return for the Indiana proposal is closest to (Round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, X.XX%.) O A. 37.04%. O B. 34.39%. OC. 16.32%. OD. 17.57%
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