Question
150-seat restaurant $8,000,000 is needed to construct the restaurant; no additional investment is needed in working capital The owners have 6,000,000 in cash and borrow
150-seat restaurant
$8,000,000 is needed to construct the restaurant; no additional investment is needed in working capital
The owners have 6,000,000 in cash and borrow the rest from the bank at 5%
The projected average seat turnover is 2 (use 320 days open in a year)
The stockholders require a 15% return on their investment annually
The restaurant pays income taxes at the rate of 25%
The restaurants estimated undistributed expenses, not including income taxes, total $2,000,000
The forecasted cost of food sold and variable labor is 50 percent of sales
What is the projected Net Income?
Group of answer choices
$900,000
$1,200,000
$1,600,000
$400,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started