FLIP FLOP HOUSE is a limited period franchise that sells sandals for a 1 year period, also known as a POP UP STORE. The set-up cost (build out) of each store is $50,000.00 and requires and initial inventory investment of $125,000. Goodwill industries will give them $25,000 for their year-end inventory . The monthly rent is $5000.00, but the year must be paid upfront to get the location and price. The sandals sell for $5.00 a pair. The sandals have cost of $1.25 per pair. The overhead cost including salaries and utilities is calculated at $.50 (50 cents) per pair. Calculated annual Break Even in A) units and B) dollars? C) How many sandals must be sold in the first year to make $600,000 profit? How much will the new store make if they sell 750,000 pairs of sandals? If FLIP FLOP HOUSE has a cost of capital of 8%. D) What is the NPV of this project if the store sells 750,000 pairs? E) What is the IRR if the store sells the 750,000 pairs? A factory is being set up in Haiti to supply all the sandals sold by FLIP FLOP HOUSE. The sandals sell for $1.25 (wholesale). The pair of sandals have a material cost of $.30 ( 30 cents per pair), plus a $.20 (20 cents per pair) of over-head cost including salaries. The factory will cost $750,000 to purchase plus $600,000 in machinery, equipment, and training set up. What is the Break Even point of the factory in A) dollars and B) units? What If all 16 FLIP FLOP HOUSE stores buy 500,000 pairs each from the factory calculate the following. The factory also has a cost of capital of 8%. A) How much profit will the factory generate selling 500,000 pairs to each of the 16 stores? What would the B) IRR and C) NPV of the factory be at the sales level of 500,000 pairs per store?