•  McDonald's is considering a major renovation of its stores with the following expected financial impact:
  • Renovation Costs: $1.2 billion
  • Estimated Increase in Annual Revenue: $350 million
  • Increased Operating Costs: $120 million annually
  • Depreciation Expense: $60 million annually
  • Tax Rate: 30%
• Requirements:
  1. Calculate the net increase in annual net income after the renovation.
  2. Prepare a five-year income projection showing the impact of the renovation.
  3. Analyze the return on investment (ROI) for the renovation.
  4. Discuss the strategic benefits of the renovation for McDonald's brand image.
  5. Evaluate the risks associated with the renovation project.