Developing proposal to open three new mexican restaurants

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Reference no: EM13943059

You are developing a proposal to open three new mexican restaurants around the metro detroit area over the next four years. The Project requires a purchase of $800,000 of equipment with a four year useful life and a book value of zero at the end of the four years. However, you expect to be able to sell the equipment at the end of the development project for $350,000. During the four years of the project, you will need $175,000 net working capital, fixed costs will be $500,000 and variable costs will be $125,000 per restaurant location. The investors that you plan to bring your proposal to require a return of at least 10% on any investments they make. Your tax rate is 30%. What is the lowest amount you should bid per restaurant? Please show work!

Reference no: EM13943059

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