Using the Case Study information, calculate the net cash flows for years 1-10 for the Hideaway:

EXHIBIT 5: ESTIHATED PROJECT (3st New Wedding an Event Space Cost 3 Parking Lot Cost 3 Demolition 5 10,000 Site Won: 5 120,000 Alterations to Existing Structue i5,000 Electrical 15,000 Interior Renomtione i5,000 Concrete 12,000 Mechanical i5,000 General 9,?00 Electrical 95,000 5 \"IR 300 General Conditions 40,000 Exterior Renovations 75 000 Professional Fees 3 445,000 Contractor 0 05,000 Architect 24,000 Engineering Design 3. Site Plan 25,000 Maintenanoeicart Shrugs Facility Mechanical 3. Electrical Engineering 10 000 Labour 3 20,000 0 124,000 Materiel 32,500 Equipment 1,000 Total E 095,350 Sthredee 105,000 Other 550 Idtctnn Equipment g 100,000 3 200,050 Nate: Professional fees were tax deductible when paid. Kitchen equipment had a capital cost aiidwance (CCA) rate of 50 per cent and a useful life of 10 years. Remaining Investments had a CCA rate of 30 per cent and a useful life cf 25 years. Also, though it was unlikely that the kitchen equipment would have any value at the end of Its useful life, Roberts estimated that the other hyestmenta would increasethe overall value ofthe club by a factor ofthree times the aftertax net cash ows at the end of year 10. However. he doubted that the \"maintenance only\" project would have any residual value at the end of 10 years. The corporate tax rate averaged 15 per cent. Rntlmp' nmnmv film EXHIBIT 6: MEMO FROH ANNE KELLY RE COSTING To: Jordan Roberts. General Manager From: Anne Kelly, Director of Special Events Re: The Hideaway Projected Costs Hi Jordan. I've spoken with my team and here's what we're thinking. Based on our current weddings held in the Ballroom, we're comfortable with my original estimate that 65 per cent of all functions will be sit-down meals and the rema'ning cocktail functions. I know we've estimated our capacity as 210 and 250, respectively. for these two types of events, and I certainly see our events almost always at capacity in the Ballroom currently. I think we're okay estimating full capacity. By the way. we've included some projected revenues for other events. Just a reminder that these events typically are rental income onlythat is. we don't provide any food or alcohol at those events. As you know, it's much more expensive to serve a full meal. I've checked with the chef and, based on our current offerings. I think we can estimate using our cunent full meal cost of $25 per person. Coddails and appetizers are. of course. less expensive, and I think we're safe to say $0.00 there per person. I would assume a rate of increase of 2 per sent On these costssimilar to our expected pricing increases. And just a reminder that we shouldn't have to factor in alcohol as we permit our clients to bring in their own wine, beer, and spirits. Based on how we currently staff the Ballroom events, I estimate that we'll need 14 serving staff members per event. I typically have the staff here for set-up through to tear-down. which usually means a 12-hour shift. Current hourly rates are, on average, $16.50. but we should count on a 2 per cent increase on this rate. Plus, I know the Ontario government has been talking about increasing minimum hourly rates. I'm not sure how that will impact all of the business here at SRGCC. I'm assuming we'll see increases in our insurance and utilities bills with this expansion. Without heat, we'll just be paying for power. and so I'm guessing that the utility bill increase will be fairly minor. say $15,000. Insurancel asked our broker. She's suggested we think about 525.000 (total) as a likely increase for both property and liability coverage. Both of these will likely increase at a 2 per cent rate as well. I'm also thinking that we'll need to increase our supplies of linens. ceremony chairs, etc. in order to have enough inventory on hand for the extra functions. I think we should count on spending $10,000 on these sorts of supplies. Finally. between myself and our manager of weddings and events. we think we can manage the extra workload. though I believe the Hideaway will take up 40 per cent of our manager's lime. Her current total compensation is $65,000, as you know. This is exciting! Let me know if I've missed anything. The Hideaway Roberts and Kelly named the converted maintenance facilitythe potential new venue spacethe Hideaway to differentiate it from the existing Ballroom In order to operate both spaces at the same time, Roberts knew they needed to expand the existing kitchen and create access from the kitchen to both spaces and purchase an additional $100,000 in kitchen equipment. Further, a grand entrance to the space was needed as well as outdoor space for cocktail receptions overlooking the golf course. Other renovations to the current space included washroom additions, a bridal suite, and a generator to provide back-up power for both the Ballroom and the Hideaway {see Exhibit 4). Roberts estimated that the renovations to transform the maintenance facility into the Hideaway would be $445,000. To keep the renovation and operating costs of the space lower and to add to the industrial feel, the Hideaway renovations would not include insulating or heating the space for winter use. Therefore, Roberts and Kelly planned to host weddings in the space during the peak wedding season and the wartne' monthsfrom May through to October. Estimated sales per wedding would be slightly higher than the current averages for the Ballroom at $13,500 for Saturday weddings and $10,500 for Sunday to Friday weddings, as the Hideaway would have a capacity of 210 guests for a seated meal or 250 guests for a standing cocktail reception; the Ballroom had a capacity of 180 guests seated and 200 standing. Kelly estimated that 65 per cent of the weddings and special events would be seated meals and the remaining 35 per cent standing cocktail receptions. Kelly predicted that, in 201?, the Hideaway would host 15 Saturday weddings, at $13,500 each, and another three weddings on otha' days of the week, at $10,500 each Since the Ballroom was already nearly sold out for prime dates in the 201? wedding season, Kelly was condeit the club could achieve this projection based on the waiting list and ntunber of potential clients who had already been turned away. By the second year of operating both spaces, Kelly projected the Hideaway would host 18 Saturday and ve non-Saturday weddings. Finally, in 2019, the Hideaway would host the full capacity of 21 Saturday weddings and another seven non-Saturday weddings. Each year, Kelly planned to increase the price per wedding by 2 per cent. In addition to weddings, Kelly estimated other opportunities to rent out the space would generate an additioml $15,000 in revemre in 2017, $25,000 in 2018, and $35,000 in 2019. Again, she estimated a steady inu'ease thereaer of 2 per cent Kelly also recognized that, to deliver two weddings at the same time, the number of kitchen and wait staff would have to increase signicantly, and both wedding timelines would have to be perfectly aligned to keep the kitchens running smoothly. Stafng the now-double wedding operation would be a challenge in such a small town. She expected to be able to hire temporary foreign workers to help with the kitchen and service requirements of the peak season. However, Kelly and Roberts would have to research how this process worked and consult with the board about this plan