Hello! Please help me answer the table in the image, and the questions at the end of the page. thank you!! :) As the project manager for HomeGrown, you are responsible for deciding which if any of the proposals to accept. HomeGrown's minimum acceptable rate of return is 20%. You receive the following data from the three contractors:ProposalType of Floor PlanInitial Costif SelectedResidualValueAlphaVery open, like an indoor farmer’s market$1,472,000 $0.00 BetaStandard grocery shelving and layout, minimal aisle space5,678,900 0.00 GammaMix of open areas and shelving areas2,125,560 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 years for which you are preparing your capital investment analysis. Your conclusions are presented in the following table.ProposalEstimated AverageAnnual Income(after depreciation)Estimated AverageAnnual Cash FlowAlpha$291,014 $351,145 Beta272,019 475,608 Gamma521,931 592,819 Final QuestionsAfter reviewing all your data, answer the following questions (1)-(3).1. What can you say about each proposal? (<, =, > 20%)ProposalInternal Rateof ReturnAlpha Beta Gamma 2. What can you say about these proposals?a. HomeGrown would be breaking even (i.e., profit = 0) if Alpha’s proposal is chosen.b. Only Gamma’s proposal is yielding more than HomeGrown’s minimum desired rate of return.c. Gamma’s proposal is the only proposal that would be acceptable to HomeGrown.Options: a, b, c, a and b, b and c 3. Which proposal is the best choice for HomeGrown given the data collected? (Alpha, Beta, Gamma) Net Present ValueEven though you're fairly certain that your evaluation and elimination is correct, you would like to compare the three proposals using the net present value method, andget 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 ofannual 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 $1at Compound Interest (Partial Table)10%20%Year1510Annual net cash flowPresent value factor0.9093.7916.145Net present valueAmount to be invested0.8332.991Present value of annual net cash flows4.192$$$Alpha$BetaGamma Average Rate of ReturnYou begin by trying to eliminate any proposals that are not yielding the company's minimum required rate of return of 20%. Complete the following table, and decide whether Alpha, Beta, and/or Gamma should beeliminated because the average rate of return of their project is less than the company's minimum required rate of return.Complete the following table. Enter the average rates of return as percentages rounded to two decimal places.Average RateEstimated AverageAnnual IncomeAverageInvestmentAccept orRejectof ReturnProposalAlphaBetaGammaProposalAlphaBeta$Gamma291,014272,019521,931Initial Cost$Cash Payback MethodYou've decided to confirm your results from the average rate of return by using the cash payback method.Using the following table, compute the cash payback period of each investment. If required, round the number of years in the cash payback period to a whole number.Cash PaybackPeriod in Years$1,472,0005,678,9002,125,5601,472,0005,678,9002,125,560Annual NetCash Inflow$19.77 %351,145475,608592,8194.7924.55412RejectRejectAccept4

The Internal Rate of return: The internal rate of return of the IRR is the discount rate at which…

Hello! Please help me answer the table in the image, and the questions at the end of the page. thank you!! :) As the project manager for HomeGrown, you are responsible for deciding which if any of the proposals to accept. HomeGrown's minimum acceptable rate of return is 20%. You receive the following data from the three contractors: Proposal Type of Floor Plan Initial Cost if Selected Residual Value Alpha Very open, like an indoor farmer’s market $1,472,000 $0.00 Beta Standard grocery shelving and layout, minimal aisle space 5,678,900 0.00 Gamma Mix of open areas and shelving areas 2,125,560 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 years for which you are preparing your capital investment analysis. Your conclusions are presented in the following table. Proposal Estimated Average Annual Income (after depreciation) Estimated Average Annual Cash Flow Alpha $291,014 $351,145 Beta 272,019 475,608 Gamma 521,931 592,819 Final Questions After reviewing all your data, answer the following questions (1)-(3). 1. What can you say about each proposal? (<, =, > 20%) 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 Alpha’s proposal is chosen. b. Only Gamma’s proposal is yielding more than HomeGrown’s minimum desired rate of return. c. Gamma’s proposal is the only proposal that would be acceptable to HomeGrown. Options: a, b, c, a and b, b and c 3. Which proposal is the best choice for HomeGrown given the data collected? (Alpha, Beta, Gamma)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 19P

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Hello! Please help me answer the table in the image, and the questions at the end of the page. thank you!! :)

As the project manager for HomeGrown, you are responsible for deciding which if any of the proposals to accept. HomeGrown's minimum acceptable rate of return is 20%. You receive the following data from the three contractors:

Proposal	Type of Floor Plan	Initial Cost if Selected	Residual Value
Alpha	Very open, like an indoor farmer’s market	$1,472,000	$0.00
Beta	Standard grocery shelving and layout, minimal aisle space	5,678,900	0.00
Gamma	Mix of open areas and shelving areas	2,125,560	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 years for which you are preparing your capital investment analysis. Your conclusions are presented in the following table.

Proposal	Estimated Average Annual Income (after depreciation)	Estimated Average Annual Cash Flow
Alpha	$291,014	$351,145
Beta	272,019	475,608
Gamma	521,931	592,819