Celina is considering opening a mezcal and tequila bar. She knows that about 2.3$ million is collected in mixed beverages alcohol taxes per year. ( at the rate of 6.7% of the gross sale and she believes her bar could get up to 0.9% of the liquor sales. Her variable cost are likely to be 20% of her sales. She plans to hire 2 full-time bartenders which get paid $30,000 each year and manager who makes $52000 each year plus 6% of revenue. Finally, she expects $20000/year in miscellaneous expense

Celina needs $175000 to buy the land in the location she wants, and $220000 to build the bar and purchase equipment. She will use straight-line depreciation over a 16 year period. She faces tax rate of 24%. She will need to hold an additional $16000 in net working capital from the start of the project, which will be freed at the end. Assume the bar will close after 16 years and that land value will not change.

In order to finance the new store, she will borrow $290000 from local bank, which will be paid back within 16 years with equal monthly payments of $2433.32. the rest of her initial capital requirements will come from her savings. she estimates that her equity will be 2.5 times as risky as investing in publicly traded stocks, which have an expected return of 8.9%. The risk free rate is assumed at 3%

determine the value of the project and if it is a good project