PROBLEM $26\mathrm{.}5$A

Capital Budgeting Using Multiple Models

V$.$ S$.$ Yogurt is considering two possible expansion plans. Proposal A involves opening $10$ stores in northern California at a total cost of $$3,150,000.$ Under another strategy, Proposal B$,$ V$.$ S$.$ Yogurt would focus on southern California and open six stores for a total cost of $$2,500,000.$ Selected data regarding the two proposals have been assembled below by the controller of V$.$ S$.$ Yogurt. All revenue and expense estimates other than depreciation will be received or paid in cash.

$\backslash$table$[[,$Proposal A$,$Proposal B$],[$Required investment,$$3,150,000,$$$2,500,000$