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?

Transactions on april 1 of the current year, andrea byrd established a business to manage rental property. she completed the following transactions during april: opened a business bank account with a deposit of $45,000 from personal funds. purchased office supplies on account, $2,000. received cash from fees earned for managing rental property, $8,500. paid rent on office and equipment for the month, $5,000. paid creditors on account, $1,375. billed customers for fees earned for managing rental property, $11,250. paid automobile expenses for month, $840, and miscellaneous expenses, $900. paid office salaries, $3,600. determined that the cost of supplies on hand was $550; therefore, the cost of supplies used was $1,450. withdrew cash for personal use, $2,000. required: 1. indicate the effect of each transaction and the balances after each transaction: for those boxes in which no entry is required, leave the box blank. for those boxes in which you must enter subtractive or negative numbers use a minus sign. (example: -300)

What two things do you consider when evaluating the time value of money

In order to be thoughtful about the implementation of security policies and controls, leaders must balance the need to reduce with the impact to the business operations. doing so could mean phasing security controls in over time or be as simple as aligning security implementation with the business’s training events.