Ar$$me Botanique in Rancho Santa Margarita, California, was started in $2012$ by Alexa Soto. She grew up with a mother who collected natural handmade aromatics and mixed different scents to create her own perfumes. Alexa fell in love with the fragility and power of smell. After receiving her Master$$s degree in Botany at UC Berkley, Alexa was fortunate to be able to start her own business, producing coveted essential oils used in the perfume industry.

Alexa initially invested in $15$ acres of land and planted various selected flowers and herbs. Alexa started out by selling her crops to large fragrance manufacturers. As time went by$,$ she began extracting and producing her own natural essential oils, establishing Ar$$me Botanique $($AB$)$ as a successful leader in natural scents in the United States.

Ar$$me Botanique now produces several concentrated essential oils. Among them, rose, lavender, tuberose, gardenia, bergamot orange, clary sage, helichrysum, spearmint, chamomile and jasmine. The oils are extracted from plants through a process of distillation and cold pressing. The oils are sold to the fragrance industry where they are blended into fragrance compositions to make perfume. While Ar$$me Botanique has an excellent reputation in the market as a natural organic grower and producer of essential oils, it is still a relatively small company. As the demand for natural products increases, Alexa believes that her company has an opportunity to capitalize on market trends and grow.

After many strategic meetings, Ar$$me Botanique has agreed that it would be willing to invest $$3,000,000$ in the fixed assets needed to generate additional sales. AB has identified $5$ potential investment projects which could all help grow the business to the next level. Your consulting services have been retained to conduct an analysis of the proposed projects and formulate a final proposal that will:

Identify which projects will create the most value for Ar$$me Botanique

explain the strategy behind the proposal

propose an optimal capital structure addressing how those capital investments should be funded.

AB has a $21\%$ corporate tax rate $($assume no taxes if EBT is negative$)$ and a required rate of return of $10\%\mathrm{.}1.$Based on your analysis, prepare a capital expenditure plan of action for the AB management team. $($Explain which projects you are recommending they fund, in what order, and why$).$ Be sure to respect AB$$s total capital investment limit $($$$3$ million$).$