Home Grown 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 considering opening severa 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. 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 Home Grown 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 Initial Cost if Selected Residual Value Alpha Very open, like an indoor farmer's market $1,472,000 $0.00 Beta Standard grocery shelving and layout, minimal aisle space Mix of open areas and shelving areas 5,678,900 0.00 Gamma 2,125,560 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 equal for each of the 10 years for which you are preparing your capital investment analysis. Your conclusions are presented in the following table. Proposal Estimated Average Annual Income (after depreciation) $291,014 Estimated Average Annual Cash Flow Alpha $351,145 Beta 272,019 475,608 Gamma 521,931 592,819 Method Comparison Compare methods of capital investment analysis in the following table to begin your evaluation of the three capital investment proposals Alpha, Beta, and Gamma. You decide to compare four methods: the average rate of return, cash payback period, net present value, and internal rate of return methods. Average Rate of Return You begin by trying to eliminate any proposals that are not yielding the company's minimum required rate of return of 20%. Complete the following table, and decide whether Alpha, Beta, and/or Gamma should be eliminated because the average rate of return of their project is less than the company's minimum required rate of return. Complete the following table. Enter the average rates of return as percentages rounded to two decimal places. Estimated Average Average Rate Proposal Average Investment Annual Income of Return Accept or Reject Alpha $ % Beta Gamma Cash Payback Method You've decided to confirm your results from the average rate of return by using the cash payback method. Using the following table, compute the cash payback period of each investment. If required, round the number of years in the cash payback period to a whole number. Proposal Annual Net Cash Inflow Initial Cost Cash Payback Period in Years Alpha Beta Gamma