Concession stand at a stadium

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Reference no: EM1377077

The local university is accepting bids for hot dog and cold drink concession at new stadium. The agreement is for a five year period. You believe that a bid of $40,000 will win contract. A preliminary analysis indicates that annual operating costs will be $35,000 and average annual sales will be $50,000. The contract can be written off during the five years. Taxes are at 40 percent rate, and your goal is to make a 20 percent return on your investment.

I have to use excel to set up the problem and to find the solution with excel.

A. Will you meet your goal if you use straight-line depreciation?
B. Would you meet your goal using sum-of-the -years' digits depreciation?

Reference no: EM1377077

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