Apps Gmail YouTube Maps Chapter 26 - Capital Investments HomeGrown Company HomeGrown Company is a chain of grocery stores that are similar to indoor farmer's markets, providing fresh, local produce, meats, and dairy products to consumers in urban areas. HomeGrown is c opening several stores in a new city, and has proposals from three contractors (Alpha, Beta, and Gamma companies) who would like to provide buildings for the new stores. concidenng Reading The amount of expected revenue from the stores will depend on the design of the contractor. For example, if HomeGrown decides on a more open floor plan, with less shelf space for products, revenue would be lower overall. However, if HomeGrown decides on a very crowded floor plan, it may lose customers who appreciate a more open feel. As the project manager for HomeGrown, you are responsible for deciding which if any of the proposals to accept. HomeGrown's minimum acceptable rate of return is 20%. You receive the following data from the three contractors Proposal Type of Floor Plan Alpha Very open, like an indoor farmer's market Standard grocery shelving and layout, minimal aisle space Gamma Mox of open areas and shelving areas Initial Cost Residual if Selected Value $1,472,000 $0.00 5,678,900 2,125,560 0.00 0.00 You have computed estimates of annual cash flows and average annual income from customers for each of the three contractors' plans. You believe that the annual cash flows will be which you are preparing your capital investment analysis. Your conclusions are presented in the following table Proposal Alpha Beta Gamma Estimated Average Annual Income (after depreciation) $313,094 272,019 527,245 Estimated Average Annual Cash Flow $351,145 475,608 592,819 Method Comparison of the 10 years for Compare methods of capital investment analysis in the following table to begin your evaluation of the three capital investment proposals Aphe, feta, and Gamma. You decide to compare four methods the ver rate of retum, cash paybeck period, net present value, and internal rate of return methods. Check My Work 2 mors Check My Works remaining Previous