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Scenario: Your client owns a successful (well, pre-COVID!) restaurant in downtown Chicago. She wants to open a 2nd restaurant in the suburbs and has asked
Scenario: Your client owns a successful (well, pre-COVID!) restaurant in downtown Chicago. She wants to open a 2nd restaurant in the suburbs and has asked you to help her choose between two locations. Key information is listed below. Using the four capital budgeting methods that we know, prepare a presentation that shows your recommendations to your client (and why). Oak Park Rosemont Initial Investment: 4,000,000 4,000,000 Annual cash inflows: $1,000,000 $1,200,000 Annual cash outflows: $600,000 $850,000 Annual non-cash (all depreciation) expenses: Use straight line depreciation to find! 25 30 # of years of expected useful life of project: For both, assume no residual value and: 10% Discount Rate Use textbook Exhibit 14B-2 (or the annuity document/chart in this module) where applicable. PROJECT 2 REQUIREMENTS: Prepare a PowerPoint presentation and/or a YouTube 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. Scenario: Your client owns a successful (well, pre-COVID!) restaurant in downtown Chicago. She wants to open a 2nd restaurant in the suburbs and has asked you to help her choose between two locations. Key information is listed below. Using the four capital budgeting methods that we know, prepare a presentation that shows your recommendations to your client (and why). Oak Park Rosemont Initial Investment: 4,000,000 4,000,000 Annual cash inflows: $1,000,000 $1,200,000 Annual cash outflows: $600,000 $850,000 Annual non-cash (all depreciation) expenses: Use straight line depreciation to find! 25 30 # of years of expected useful life of project: For both, assume no residual value and: 10% Discount Rate Use textbook Exhibit 14B-2 (or the annuity document/chart in this module) where applicable. PROJECT 2 REQUIREMENTS: Prepare a PowerPoint presentation and/or a YouTube 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
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