Present value tables areneeded.) O'Mally Department Stores is considering two possible expansion plans. One proposal involves opening 5 stores in Indiana at the cost of$1,920,000. Under the otherproposal, the company would focus on Kentucky and open 6 stores at a cost of$2,500,000. The following information isavailable:
| |
Indiana proposal |
Kentucky proposal |
| Required investment |
$1,920,000 |
$2,500,000 |
| Estimated life |
10 years |
10 years |
| Estimated residual value |
$50,000 |
$80,000 |
| Estimated annual cash inflows over the next 10 years |
$400,000 |
$500,000 |
| Required rate of return |
10% |
10% |
The net present value of the Indiana proposal is closest to________ andwould/would not be a desiredproject?
A. $1,171,800,
B. $461,650,
C. $557,300,
D. $538,000,