The owner of Saskatoon Corporation has asked managers to submit capital project proposals for potential new stores. One option is to open the store in Edmonton, Alberta. The other option is to open the store in Yellowknife, North West Territories. The company does not have the financial capitability to do both projects and therefore only one of the two stores will move forward. The company expects a minimum return of 16% and requires a minimum payback period of 5 years. Ignore Taxes. Initial investment for construction Initial investment for Equipment Working capital required Net Annual Cash Inflows Over Expected Life Expected life Salvage value of store assets at end of expected life Maintenance of equipment in year 10 Maintenance of equipment in year 20 Release of working capital at end of expected life a) c) d) Edmonton 800000 195000 144000 200000 20 years 0 44000 0 144000 Which store would you open using the NPV method? What store would you open using the Profitability Index? What store would you open using the Payback Method? Taking into account all three methods, what overall recommendation would you make to the owner? Why? Yellowknife 1000000 140000 165000 220000 30 years 100000 26000 18000 165000