a chinese would like to set up a restaurant. he believed that first stage of investment would be 840000, land & bldg 570000, renovations and equipment 170000, working capital 50000, furniture 40000 and other start up cost 10000. he has only half 420000 and planning of 2 options: to have a partnership with a friend and invest, or bank loan for 20 yr term, 4.25 per annum annually.

he is uncertain of his business plan as he worries the following factors that could affect the capital structure in terms of taxes, bankruptcy, its impact of financing on investments, signals and access to fairly priced capital.

he projected the medium and worst revenue predictions, estimated revenue of 68000 as best case scenario, 51000 medium case, 34000 worst case. the business might be a seasonal and targets are students. he estimate the profitability of 75 percent capacity over a year (51000) and 50% (34000) the lowest, assume taxe to 40%

the projected monthly operating expenses at best scenario (100%)

total variables 33,100

fixed cost 18100

what can be the financial analysis, is the business will be a successful, it will be profitable, stable, solvency and viability?