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Rather than getting a part - time job to support yourself, you are thinking about opening an espresso stand near campus for the 4 years
Rather than getting a parttime job to support yourself, you are thinking about opening an espresso stand near campus for the years you are at UO You've done fairly limited market research costing $ for copying and distributing surveys and have come to the conclusion that you can sell drinks per week during the week academic year at an average price of $ per drink. Your variable costs will be only about $ per drink. You will keep the stand open hours a week, and work of those yourself. You will employ someone else at $ per hour for the other hours. The stand and espresso machine will cost about $ You hope to sell your business including the name you will have built, cart and machine for about $ when you leave school. You do a straight depreciation over years to salvage value. You will have to pay an annual lease of $ for the right to secure your cart location near campus. You will invest $ in inventory today. It will stay at $ through year and drop to zero by the end of year There are no account receivables and account payables. The tax rate is If your discount rate is what is the NPV of doing the espresso stand? should you do the espresso stand? convert all weekly cash flows to annual ones and do the analysis at the annual level You will only operate the stand during the academic year.
tableRevenueVariable CostSalaryLeaseDepreciationEBITTaxEBIATCapexNWCChg NWCSalvageBook Value CartCapital Gain CartCapital Gain TaxNet after tax salvageFCFPV of each FCFNPV fill in excel sheet with answer
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