If you install the game center

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If you install the game center Rent building space Rent video games Salaries Utilities Insurance and other $18,000 $30,000 $17,000 $5,400 $9600 A) Compute the expected net annual cash inflows from each alternative. B) Assume that the cost of capital is 16%. Compute the NPV of each alternative. Which altemative would you recommend? C) Assume that the company decides to accept alternative 2 At the end of the first year the company finds that only 21,000 people used the game genter during the year (each person spent $5 on the games) Also the snack bar provided a net cash inflow of only $13,000. Considering this information, does it appear that the game center will provide the company's 16% required rate of return? Show computations to support your answer. PART 2 50 oints A) Calculate the internal rate of return for both alternative B) How would your answer change if you had a tax rate of 40% (recalculate both altematives and show your work) C) Based on your answer in calculate the IRR for both alternatives. D) In general: How would an increase in inflation affect your NPV and IRR