Transcribed Image Text
Simply Chocolate Company is considering two possible expansionplans.Proposal X involves opening five stores in North Carolina ata cost of $2,400,000. Under Proposal Y, the company would focus onVirginia and open six stores at a cost of $3,000,000. The followinginformation is given for the two proposals: ProposalX Proposal YRequiredinvestment $2,400,000 $3,000,000Estimatedlife 10years 10 yearsEstimated residualvalue $200,000 $200,000Estimated annual net cashflows $450,000 $580,000Required rate ofreturn 14% 14%Based on the above following problem,Required: for each proposal, you are asked tocalculatea.Pay back Periodb.Accounting Rate of Returnc.Net Present Value d.Profitability Index3.Indicate which proposal is the better investment.