Reference no: EM131180419
Nance’s Restaurant, a local independent restaurant, is evaluating new point-of-sale (POS) systems and must determine if a new installation is feasible. A new POS installation would include both software and hardware, with a total cost of $20,000. Nance’s Restaurant is currently operating without a point-of-sale system and utilizes a chit system with carbon copy papers that allow the waitstaff to provide a copy to the kitchen and the customer while retaining a copy for accounting purposes. Management is aware that this is INVESTMENT ANALYS IS 245 an archaic system and that a POS system will create efficiencies, but they are not sure it is worth the cost. Through analysis, management has determined that a POS system would allow the waitstaff to turn tables quicker, therefore increasing the number of guests serviced and the sales volume. Another advantage of the POS system is that it provides reports to management, allowing them to better analyze their business. Taking all of these factors into consideration, Nance’s management forecasts incremental increases in profit over the next three years of $8,000, $9,000, and $10,000.
Questions:
1. Determine the payback period, present value, and net present value of this project for the three-year period, utilizing an 8% discount rate.
2. Management has received an offer from another POS vendor with installation costs of $25,000. The second vendor is offering increased functionality in the form of additional cost control reports, which would allow the restaurant to realize an additional $500 in incremental profits per year for a total of $8,500, $9,500, and $10,500. Financially, does this option fit Nance’s Restaurant’s criteria? Please explain your answer.
Find the cash flow from mark-to-market proceeds on contract
: The multiplier for a futures contract on the stock-market index is $250. The maturity of the contract is one year, the current level of the index is 700, and the risk-free interest rate is 0.5% per month. The dividend yield on the index is 0.2% per m..
|
What are NPV and IRR of decision to replace the old machine
: A firm is considering an investment in a new machine with a price of $18 million to replace its existing machine. The current machine has a book value of 6million and a market value of $4.5 million. The new machine expected to have a four-year life, ..
|
What the implications of this case for online defamation law
: The task is to write a case note on Hockey v Fairfax Media Publications Pty Limited [2015] FCA 652 where Hockey claimed to be deframed by Fairfax online. What are the implications of this case for online Defamation law in Australia
|
What are the restrictions on interior finish materials
: What are the restrictions on interior finish materials? Outline in complete detail the requirements for emergency egress from the building.
|
Determine payback period-present value-net present value
: Nance’s Restaurant, a local independent restaurant, is evaluating new point-of-sale (POS) systems and must determine if a new installation is feasible. A new POS installation would include both software and hardware, with a total cost of $20,000. Det..
|
Analyze the role of u.s. pharmaceutical companies
: Analyze the role of U.S. pharmaceutical companies in the health care industry, and give your opinion on whether or not you believe the protocols used in their business transactions falls under ethical / moral considerations.
|
The main features of leadership from an islamic perspective
: DISCUSS EACH OF THE FOLLOWING TOPICS:- An Islamic Perspective on Leadership: View on the Qualities of Leaders - The main features of leadership from an Islamic perspective.
|
Develop and implement operational plans
: Explain what operations planning is, and detail the processes that should be followed to develop and implement operational plans. Outline the risk analysis procedures that might be followed and the procedures that would be followed to develop cont..
|
What is the tax effect of distribution to Melodie and MIP
: At the beginning of the tax year, Melodie's basis in the MIP LLC was $60,000, including Melodie's $40,000 share of the LLC's liabilities. At the end of the year, MIP distributed to Melodie cash of $10,000 and inventory (bais of $6,000, fair market va..
|