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Net Present Value Even though you re fairly certain that your evaluation and elimination is correct, you would like to compare the three proposals using

Net Present Value
Even though youre fairly certain that your evaluation and elimination is correct, you would like to compare the three proposals using the net present value method, and get some data about the internal rate of return of the proposals, each of which are expected to generate their respective annual net cash inflows for a period of 10 years.
Compute the net present value of each proposal. You may need the following partial table of factors for present value of an annuity of $1. Round the present value of annual net cash flows to the nearest dollar. If your answer is zero enter "0". For the net present value, if required, use the minus sign (-) to indicate a negative amount.
Present Value of an Annuity of $1
at Compound Interest (Partial Table)
Year 10%20%
10.9090.833
53.7912.991
106.1454.192
Alpha Beta Gamma
Annual net cash flow $fill in the blank b2ee2409100d03a_1
351,145
$fill in the blank b2ee2409100d03a_2
461,411
$fill in the blank b2ee2409100d03a_3
598,133
Present value factor fill in the blank b2ee2409100d03a_4
fill in the blank b2ee2409100d03a_5
fill in the blank b2ee2409100d03a_6
Present value of annual net cash flows $fill in the blank b2ee2409100d03a_7
$fill in the blank b2ee2409100d03a_8
$fill in the blank b2ee2409100d03a_9
Amount to be invested fill in the blank b2ee2409100d03a_10
1,472,000
fill in the blank b2ee2409100d03a_11
5,678,900
fill in the blank b2ee2409100d03a_12
2,125,560
Net present value $fill in the blank b2ee2409100d03a_13
$fill in the blank b2ee2409100d03a_14
$fill in the blank b2ee2409100d03a_15
Question Content Area
Final Questions
After reviewing all your data, answer the following questions (1)-(3).
1. What can you say about each proposal?
Proposal Internal Rate
of Return
Alpha
Beta
Gamma
2. What can you say about these proposals?
a. HomeGrown would be breaking even (i.e., profit =0) if Alphas proposal is chosen.
b. Only Gammas proposal is yielding more than HomeGrowns minimum desired rate of return.
c. Gammas proposal is the only proposal that would be acceptable to HomeGrown.
3. Which proposal is the best choice for HomeGrown given the data collected?

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