Reference no: EM13914434
1- Estimate the annual cash flows for the brewpub project. Use the "best case scenario". To do this, calculate the annual revenues and annual expenses for the 10 year project,any changes in the net working capital, and any changes to capital expenditures. Describe all assumptions and calculations you used to arrive at the final cash flows.
2- Calculate the NPV and IRR of the project given the information presented using the "best case scenario".
Project Details are:-
The space cost $2500 per month. Intial construction cost could be $250,000. In a barrel of beer, there are 31 gallons of beer. There are 8 pints in a gallon. Samantha estimates that each seat in restaurant will require about 7 barresl of beer (best case scenario) per year. They own a 80 seat restaurant . Cost of high quality brewpub system is $300,000. Ingredients costs $4,000 to make 10 barrels of beer. These costs are expected to increase 5 percent per year. Maintenance cost of about $15,000 per year (after the first year of operations). Three additional servers per day at a cost to the restaurant of $80 per day per server , and servers typically work 320 days out of the year. An additional person to run the brewery machinery on a full time basis at a starting salary of $40,000 per year. The business increase salary at 3 percent per year. Insurance cost 3000 per year. Utilities costs about $24000 per year. An fees to obtain license is $65,000 and then $700 per year as a license renewal fee. The restaurant paid a media fees of $20,000 and then expect the advertisement fees of $80,000 per year.
The sale price is set on $5 per pint during the first year of operation. They hope to increase this price by 3 percent each year thereafter.
|
Amount the needs to be deposited now
: If a bank pays 9% compounded quarterly, how much should be deposited now to have $1200 in 6 years from now?
|
|
Calculating real returns and rosk premiums
: Calculating Real Returns and Rosk Premiums [LO1] For problem 9, suppose the average inflation rate over this period was 3.5 percent and the average T-bill ate over the period was 4.2 percent. What was the average real return on Crash-n-Burn's stock?
|
|
Calculating returns-bought bond with an annual coupon
: Calculating Returns [LO1] Suppose you bought a bond with an annual coupon of 7 percent one year ago for $970. The bond sells for $940 today. What was your total nominal rate of return on this investment over the past year?
|
|
Assignment work in python
: Write a function interleave two pictures take the first 20 pixels from the first picture and then 20 pixels from the second picture and then the next 20 pixels from the first picture and then the next 20 pixels from the second picture and so on till ..
|
|
Estimate the annual cash flows for the brewpub project
: Estimate the annual cash flows for the brewpub project. Use the "best case scenario". To do this, calculate the annual revenues and annual expenses for the 10 year project,any changes in the net working capital, and any changes to capital expenditure..
|
|
Franchising is a win-win combination
: Franchising is a win-win combination; both franchisees and franchisors are guaranteed success. The main reasons small businesses fail are poor management skills on the part of owners, inadequate capital, and poor planning.
|
|
Calculate degrees of financial leverage-operating leverage
: The last Gasp Water Company sells water by the gallon for a price of $.75 per gallon. Fixed costs for the company are $2,000,000 of 10% bonds on its balance sheet. Calculate the degrees of financial leverage, operating leverage, and composite leverag..
|
|
Calculating returns and variability
: Calculating Returns and Variability [LO1] You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 7percent, -13 percent, 21 percent, 34 percent and 15 percent. What was the arithmetic average return on Crash-n..
|
|
How long will it take to fill an empty warehouse
: A warehouse holds 1000 cubic meters of cartons. These cartons come in three sizes: little (1 cubic meter), medium,(2 cubic meters), and large(3 cubic meters). The cartons arrive at the following rates: little, every 10+10 minutes; medium, every 15 mi..
|