Business, 24.03.2020 19:02 fortwill05

You are planning to open a small restaurant on Fowler Ave. featuring authentic Cuban food. You would like to do a capital budgeting analysis to determine if this is a good business opportunity. Here are your main projections of this restaurant, assuming you will run the restaurant for 12 years: To start up, you have to invest $200,000 for your fixed assets. Revenue in first year is $200,000, and should grow by 2.5% per year. Rent of the storefront costs $36,000 per year, and should grow by 1% per year. Employee salaries cost $80,000 per year. Utilities cost $5,000 per year. COGS (food supplies, kitchen equipment, silvers, etc) cost $50,000 per year. Depreciation is $9,000 per year. After 12 years in business, you plan to leave the business and sell your assets. The estimated selling value for all your fixed assets is $120,000. Income tax rate is 30%. Capital gains tax rate is 15%.

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You are planning to open a small restaurant on Fowler Ave. featuring authentic Cuban food. You would...

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