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HomeGrown Company new stores The amount of expected revenue from the stores will depend on the design of the contractor. For example, if HomeGrown decides

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HomeGrown Company 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 shel 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 responstle for deciding which if anyof following data from the three contractors: e proposals to accept. Home owns mn mu acceptable rate of return s 0%. You receve he Proposal Type of Floor Plan Alpha Very open, like an indoor farmer's market Beta Gamma Mix of open areas and shelving areas Initial Cost if Selected $1,472,000 5,878,900 2,125,560 Residual Value $0.00 0.00 0.00 Standard grocery shelving and layout, minimal aisle space You have computed estimates of annual cash flows and average annul inoome 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. Estimated Average Annual Income (after depreciation) Estimated Average Proposal Alpha Beta Gamma Annual Cash Flow $302,054 272,019 527,245 $351,145 489,805 603,446

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