Recently, Ryan began to investigate one of the fastest-growing fast-food franchises in the country, Chucks Chicken Shack. A Chucks Chicken Shack franchise costs $31,800, an amount that is amortized over 15 years. As a franchisee, Ryan would need to adhere to the companys building specifications. The building would cost an estimated $477,000 and would have a $53,000 salvage value at the end of its 15-year life. The restaurant equipment (fryers, steam tables, booths, counters) is sold as a package by the corporate office at a cost of $212,000, will have a salvage value of $10,600 at the end of its five-year life, and must be replaced every five years. Ryan estimates the annual revenue from a Chucks Chicken Shack franchise at $1,007,000. Food costs typically run 36% of revenue. Annual operating expenses, not including depreciation, total $450,500. For financial reporting purposes, Ryan will use straight-line depreciation and amortization. Based on past experience, he uses a 16% discount rate.

-Calculate the restaurants net present value over the franchises 15-year life

-Use Excel or a similar spreadsheet application to calculate the restaurants internal rate of return over the franchises 15-year life

-Calculate the restaurants payback period.