Reference no: EM131781222

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,