Dutch Bros. Coffee is a privately held drive-through coffee company, with headquarters in Grants Pass Oregon and over 290 locations in seven states (Oregon, Washington, California, Idaho, Arizona, Nevada, and Colorado). Its core values are focused on Speed, Quality and Service. Its strategy is to grow the drive-through coffee market. While it is growing quickly its growth hasn't taken the company away from its roots and the company donates over $2 million a year to its local communities and nonprofit organizations. The company is currently considering two possible capital investment plans. Plan A would involve opening 100 new shops in Texas at a cost of $8,940,000. Expected net cash inflows are expected to be $1,600,000 per year for 20 years with an estimated residual value of $1,000,000. Plan B is to invest in solar roof top panels at their current drive-through shops at a cost of $8,540,000 with no residual value. This plan is expected to generate net cash inflows of $1,400,000 from savings in electricity per year for 25 years. Dutch Bros. uses straight-line depreciation and requires an annual return of 8%.

Required:
Compute the payback period, the ARR, NPV, and approximate IRR of these two expansion plans.

Blue computers, a major pc manufacturer in the united states, currently has plants in kentucky and pennsylvania. the kentucky plant has a capacity of 1 million units a year and the pennsylvania plant has a capacity of 1.5 million units a year. the firm divides the united states into five markets: northeast, southeast, midwest, south, and west. each pc sells for $1,000. the firm anticipates a 50 perc~nt growth in demand (in each region) this year (after which demand will stabilize) and wants to build a plant with a capacity of 1.5 million units per year to accommodate the growth. potential sites being considered are in north carolina and california. currently the firm pays federal, state, and local taxes on the income from each plant. federal taxes are 20 percent of income, and all state and local taxes are 7 percent of income in each state. north carolina has offered to reduce taxes for the next 10 years from 7 percent to 2 percent. blue computers would like to take the tax break into consideration when planning its network. consider income over the next 10 years in your analysis. assume that all costs remain unchanged over the 10 years. use a discount factor of 0.1 for your analysis. annual fixed costs, production and shipping costs per unit, and current regional demand (before the 50 percent growth) are shown in table 5-13. (a) if blue computers sets an objective of minimizing total fixed and variable costs, where should they build the new plant? how should the network be structured? (b) if blue computers sets an objective of maximizing after-tax profits, where should they build the new plant? how should the network be structured? variable production and shipping cost ($/unit) annual fixed cost northeast southeast midwest south west (million$) kentucky 185 180 175 175 200 150 pennsylvania 170 190 180 200 220 200 n. carolina 180 180 185 185 215 150 california 220 220 195 195 175 150 demand ('000 units/month) 700 400 400 300 600