Homerown company Home Grown Company is a chain of grocery stores tute similar to indoor farmer's markets, providing fresh, local producereat, and dairy products to consumers in Donar Home Grown is considering opening several stores in a new city, and has proposals from three contractors (Alphu. Bet, and Games companies) who would not to provide bulding for the new stores The amount of expected revenue from the stores will depend on the design of the contractor. For example, it HomeGrown decides on a more con floor plan, the shell space for products, revenue would be lower overal. However, Home Grown decides on a very crowded floor plan, it may lose customers who appreciate a mers open fool As the project manager for Home Grown, you are responsible for deciding which it any of the proposals to accept Home Growly minimum acceptable rate of or You receive the Perfowing data from the three contractors Proposal Type of Floor Plan Alpha Very open. Me an indoor farmer's market Beta Standard grocery shelving and layout, minimal alle space Gamma Mx of open areas and shelving areas Investment if selected Residual Value $1,472.000 50.00 $8.070,300 50.00 52.325,700 $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 yearu for which you are preparing your call investment analysis. Your conclusions are presented in the following table Proposal Alpha Estimated Average Annual Income (after depreciation) $291,014 $201.198 Estimated Average Annual Cash Flow $351,145 $509,141 $848,654 Beta Gamma $571.090 Previous 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 into and decide whether Aipht, Beta. andior Gamma should be eliminated because the average rate of return of their project is less than the company's minimum required rate of retum Complete the following table. Enter the average rates of roton as percentages rounded to two decirmw places Estimated Average Annual Income Average Investment Accept or Reject? Proposal Alpha Average Rate of Return % S $ 15 $ $ Beta % % Garm S Cash Payback Method Youve decided to confirm your results from the average rate of return by using the cash paytrack method. Using the following table, compute the cash payback period of each investment of required, round the number of years in the cash paytrack period to a whole number Cash Payback period in Years Initial Cost Annual Net Cash Inflow Proposal Alpha on $ $ Beta $ S $ Gamma Previous me Chark My Work uses remaining Even though you're tainty certain that your evaluation and elimination is correct, you would be to compare the three proposals ving the represent value tod, and potentia about the internal rate of return of the proposals, each of which are expected to generate their respective annust net cash infows for a period of op Compare the net present venue of each proposat. You may need the following partial tatto of factors for presentante tant els 1.31. Beser amourts matematuh outlow negative numbers using a minus sign. Round the present value of anual net cash flows to the newest dolar. Present Value of an Annuity of 31 at Compound Interest (Partial Table) 20% Year 10% 0.000 0.833 5 2.901 3.701 6.145 10 4.192 Beta Gamma Alpha $ $ Annual net cash flow Present value factor $ $ Present value of annual net cash flows $ $ $ S Loss amount to be invested s $ $ Net present value Nuestions Previous Check My Work 2 more Check My Work usos remaining Instructor Save and Ex Submit Assignment for Grading After review your data answer the following questions (1) 1. What can you say about each proposal? Internal Rate of Return Proposal Alpha Beta Gamma 2. What can you say about these proposals? Check all that apply Gamma's proposal is the only proposal that would be acceptable to HomeGrown Only Gamma's proposal is yielding more than Home Grown's minimum desired rate of return Home Grown would be breaking even de profit - ) Alpha's proposal iq chosen 3. Which proposal is the best choice for Home Grown given the data collected? Alpha Beta Gamma