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Scenario: Your client owns a successful restaurant in downtown Chicago (at least pre-Covid-19!). She wants to open a second restaurant in the suburbs and has
Scenario: | ||||||
Your client owns a successful restaurant in downtown Chicago (at least pre-Covid-19!). | ||||||
She wants to open a second restaurant in the suburbs and has asked you to help her choose between | ||||||
prepare a presentation that shows your recommendation to your client (and why). | ||||||
Forest Park | Rosemont | |||||
Initial Investment | (see your specific investment amount below) | |||||
Annual cash inflows | $1,000,000 | $1,100,000 | ||||
Annual cash outflows | $400,000 | $650,000 | ||||
Annual non-cash (all depreciation) expenses: | ||||||
Use straight line depreciation to find! | ||||||
# of years of expected useful life of project | 25 | 30 | ||||
For both, assume no residual value and: | (see your specific discount rate below) | |||||
Use textbook Exhibit 13B-2 (or the annuity document/chart in this module) where applicable. | ||||||
PROJECT 2 REQUIREMENTS: | ||||||
Prepare a PowerPoint presentation and/or Zoom video that you would give/show to your client that clearly | ||||||
identifies your recommendation as to which location she should select to open her second restaurant. | ||||||
Additional MUST HAVES, include clearly identified calculations of the four capital budgeting methodologies | ||||||
(showing your work, not the work of Google or Excel programmers!) we have used in this module, | ||||||
and sufficient information on what these metrics mean, particularly as it relates to your preference decision. | ||||||
Initial Investment is $2,500,000 with a discount rate or any number between 4 to 14%
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