1) Calculate and present the Cash flow spreadsheet, Net Present Value, Internal Rate of Return, MIRR and payback method calculations for evaluating each investment. 2)Summarizeeach opportunity for their payback period, net present value, internal rate ofreturn and modified internal rate of return.

3)Show recommendation, noting potential opportunities and risks. Be clear on your recommendation with written supporting analysis.

You can also use excel spreadsheets to paste into the PowerPoint showing Payback method, Net Present Value method, 5-year cash flow schedule, Internal Rate of Return and Modified Internal Rate of Return calculations. Rank the proposals in order of preference. IRR should be calculated by calculator or excel.

You can also use excel spreadsheets to paste into the PowerPoint showing Payback method, Net Present Value method, 5-year cash flow schedule, Internal Rate of Return and Modified Internal Rate of Return calculations. Rank the proposals in order of preference. IRR should be calculated by calculator or excel.

Amazon.com Inc. Expansion Analysis Comprehensive Capital Budgeting Decision Project Project must be submitted using a color PowerPoint presentation to support your position on what Amazon.com Inc. should do. You can also use excel spreadsheets to paste into the PowerPoint showing Payback method, Net Present Value method, 5-year cash flow schedule, Internal Rate of Return and Modified Internal Rate of Return calculations. Rank the proposals in order of preference. IRR should be calculated by calculator or excel. 1. Introduction Summary of Investment opportunities that will be analyzed 2. Supporting documentation showing your calculations for payback, net present value, cash flow statements, Internal Rate of Return and MIRR. This could be a summary page of each individual investment analyzed or contain all supporting documentation. 3. Note risks and opportunities associated with each investment. These could be noted from the text below or researched by you and included in the report. 4. Conclusion - give your recommendation to the management team. 5. Attach appendix back up where appropriate. Investment Opportunities Payback, Net present value, Cash Flow spreadsheet, internal rate of return and Modified Internal Rate of Return methods Amazon.com Inc., led by Chairman and CEO Jeff Bezos and his management team are looking to expand their business model in the United States. They are looking at investing in three different business(s) and capitalizing on the Amazon name to increase revenues and profit. Three opportunities have been identified to the management team: 1.) Open Amazon convenience stores across the United States, 2.) Open Amazon Studios to develop television shows, movies and comics, and 3.) Purchase Gannett Co. Inc. to expand Amazon's newspaper publishing base. Jeff Bezos would like you to evaluate these three potential capital investments for them. While all three business propositions present Amazon with a unique opportunity in the marketplace it serves, the capital budget has been limited to $850M due to a concern of shareholder backlash if profits due not materialize quickly. CEO Jeff Bezos has hired you to do the Capital Budgeting analysis on the three investment opportunities below. All projects must exceed Amazon's cost of capital. Amazon requires a five-year outlook on their investments. Bezos expects a thorough analysis with a solid recommendation on what Amazon.com Inc. should do. There has been an increasing demand by shareholders to invest in profitable capital projects. Historically, Amazon has not provided investors with large profits, even though their revenue was over $107B in 2015. Bezos has always taken a long-term view on Amazon's profitability goals, but with shareholders unhappy, he feels pressured to invest in some profitable business ventures. 1. Amazon Fresh Convenience Stores - across the United States - Amazon management is excited about investing in this awesome new brick and mortar concept. Customers will order their milk, meats and other perishable fruits and vegetables online for same day pick up. In addition, these stores can be used as same day or next day pick up of any item ordered on Amazon.com. How cool is that! Amazon is already the world's largest online retailer. Why not become the world's largest online grocery order and pick up company in the universe? We can increase revenues/profit by selling $15 monthly Fresh Food subscription service, in addition to making a small margin on the groceries we sell. The stores should be big enough to stock our most popular books, movies and television shows, not to mention our Fire and Kindle products. Bezos estimates achieving a 30% Gross Profit Margin after subtracting his cost of goods sold. While online grocery orders account for about 2% of total grocery sales in the United States, research indicates the online grocery market could more than double to over $42 billion this year. However, CEO Bezos, cautions that this might not be sustainable as new national and local competition will keep popping up. Wal-Mart and local Farm to Food co-ops are expanding also. He forecasts Year 1 revenue per store at $300,000. The 2016 Earnings Before Depreciation and Taxes are forecast at 28% of Revenue each year. He projects that in Years 2 - 5 he can increase his EBDT by 10% a year by increasing customer count and adding more products. Amazon's plan is to purchase 1,100 former Radio Shack stores for $110M and to spend $200,000 to remodel each store. The entire purchase price will be taken over 15 years MACRS. CEO Jeff Bezos is excited about this trend setting online grocery business, \"With Amazon's name recognition, this is bound to be a success! 2. Amazon Studios - Would be developed as an in-house production company to develop television shows, movies and comics to be sold through Amazon streaming or books. Amazon management is excited about investing in a production company to capture the lucrative profits of releasing your own developed material. Our plan is to develop 12 movies a year for theater release, but offer these movies to our Prime members within 30 - 60 days. It is a win-win, earn revenue/profit at the box office and increase Prime membership due to our TV shows and quick release of major movie titles. This is a new frontier for movie distribution. We will be the first to develop this movie release business model. Management estimates achieving a 35% Gross Profit Margin after subtracting the studios production costs. However, CEO Bezos, cautions that NetFlix and Hula are not going to roll over and surrender the streaming business to us. They may follow suit by making their own movies. In addition, the cost to make a movie is around $70M and the cost to distribute the movie can run $30M. There is risk. He forecasts Year 1 Revenue at $550M. The 2016 Earnings Before Depreciation and Taxes are forecast at 20% of Revenue each year. He projects that in Years 2 - 5 he can increase his EBDT by 5% a year by reducing production and distribution costs. Equipment purchase price is projected to be $200M to be taken over 15 years MACRS. Jeff Bezos is enthusiastic on Amazon Studios. \"Sure there are risks, but the rewards greatly outweigh those risks. Besides, I can take my wife on the red carpet at the Oscars.\" 3. Purchase Gannett Company - Amazon management is excited about investing in the United States largest newspaper publisher. Gannett controls publications in over 100 markets in the Midwest and South. The crown jewel is The USA Today, but other major papers include The Arizona Republic, The Indianapolis Star, The Cincinnati Enquirer, and The Des Moines Register. This acquisition would fit nicely with our Washington Post purchase in 2014. That purchase included The Dallas Morning News and Minneapolis Star-Tribune. There is money to be made here by reducing staffing resources and having the papers print the same national stories. I know published print is slowly disappearing, but there will always be a need. Besides, we sell advertising and online subscriptions on the internet newspaper and make money that way too. Bezos estimates achieving a 35% Gross Profit Margin after subtracting his cost of production. By leveraging resources, controlling costs and maximizing internet advertising revenue, this can be a profitable business. However, CEO Bezos is cautious. The younger generation does not read newspapers as faithfully as their parents/grandparents. They get their news feeds from Facebook, Twitter, Google, and others. He forecasts Year 1 revenue at $490M. The 2016 Earnings Before Depreciation and Taxes are forecast at 33% of Revenue each year. He projects that in Years 2 - 5 he can increase his EBDT by 4% a year by leveraging staff duties and increased advertising. Amazon thinks $500M is a fair purchase price.to be taken over 15 years MACRS. CEO Bezos likes the idea of being a publishing czar! Amazon wants to know where they should be spending capital dollars for the long-term. They have asked you to analyze the three business opportunities identified above. Marketing has adjusted the sales revenue projections for each of the three alternatives presented above to account for risk. The Earnings Before Depreciation and Taxes (EBDT) are projected as follows: Amazon Fresh Amazon Studios Year 1............ 2............ 3............ 4............ 5............ EBDT $ Gannett Co. EBDT $ EBDT $ Depreciation Expenses are projected as follows: Amazon Fresh Amazon Studios Year Deprec. Deprec. Gannett Co. Deprec. 1............ 2............ 3............ 4............ 5............ $ $ $ Tips for presentation: A. Calculate and present the Cash flow spreadsheet, Net Present Value, Internal Rate of Return, MIRR and payback method calculations for evaluating each investment. Each investment scenario should have its' own PowerPoint slide. B. Show one slide that summarizes each: Amazon Fresh Amazon Studios Gannett Co. Payback Period: Net Present Value: Internal Rate of Return Modified Internal Rate of Return C. Show one slide with your recommendation, noting potential opportunities and risks. Be clear on your recommendation with written supporting analysis