UTAS graduates Gavin and Sarah have been best neighbours and friends since childhood. They both love burgers, and during their busy student lives, they found it made a very convenient and tasty meal. However, they noticed, that after eating their burgers they were not feeling so healthy after a meal loaded with cheese, fatty meats, and other questionable ingredients. They often wished they had the option of a healthy, plant-based burger cooked in a specialised wood-fired smoker barbecue grill to give it a unique flavour and organic healthy ingredients. So, newly graduated, they have decided, this year, to embark upon a joint take-away business to deliver a healthy, sustainably sourced and cooked, plant-based burger. In doing so, they are hoping to capitalise on the rising demand for all things sustainable, and become a market leader in plant-based, organic, fast-food alternatives. Each is contributing $50,000, making their start-up capital $100,000. The first step in their business plan was to conduct a survey, to identify whether potential customers would be happy to purchase plant-based, healthy organic burgers. The results were positive, on both counts. However, given that specialised wood-fired smoker barbeque grills are not standard in leases available within their target area, installing them will be an additional initial cost. As an accountant who is highly recommended in Launceston, you are approached by Gavin and Sarah to advise them on the feasibility of their project. You are required to provide them with a report and a separate Excel sheet.

Use the data given to:

1. Cash Flow Budget

Task: Prepare a cash flow budget to assess the need for additional cash.

Action: Create a budget that projects cash inflows and outflows to determine if the initial capital is sufficient or if additional funding is required.

2. Investment Analysis (Claire).

Task: Calculate the payback period and Net Present Value (NPV) of the project.

Action: Assess how long it will take for the project to repay its initial investment (payback period) and calculate the NPV to evaluate the project's profitability over time.

1. Gavin and Sarah's Plant-based Organic Barbeque Grilled Burgers Sales Budget For the First Three Years \begin{tabular}{|c|c|c|c|c|} \hline & ,..Year.1.... & Y..Year? & Year 3 & ....Total \\ \hline Units & 14800 & 24369 & 29234 & \\ \hline Seling price & $14.90 & \$17.14: & $19.71: & \\ \hline Sales & 3217,540 & $417,546 & 3576,063 & $1,211,149 \\ \hline & & & & \\ \hline & & & & \\ \hline \end{tabular} 2.1. Gavin and Sarah's Plant-based Organic Barteque Grilled Burgers Variable and Fixed Expenses For the First Three Years \begin{tabular}{|c|c|c|c|c|} \hline Variable Expenses & Year 1. & Year 2 & Year 3 & Total \\ \hline Cast of gaods sald/stocks & 87.016: & 167018: & 230,425 & 484.460 \\ \hline Beverages & 8.702 & 9137 & 9594 & 27432 \\ \hline Accounting fees & 3263 & 3.589 & 3948 & 5.350 \\ \hline Bark fees and charges & 180 & 240 & 300 & 720 \\ \hline Kitchen utensils/bols ( $300 ) & 5.439 & 5982 & 6.5814 & 18.001! \\ \hline Mator vehicle expenses & 4.351 & & 5264 & 14401 \\ \hline Other expenses & 2175 & 2393 & 2632 & 7.201 \\ \hline Repairs and maintenance & 4.351 & 4.786 & 5264 & 14401 \\ \hline Shipping and delivery costs & 6.526 & & 7.897 & 21602 \\ \hline Wages and Salaries & 43,500 & 47,859 & 52.645 & 144,011 \\ \hline Total variable expenses & $165,510 & $252,969 & $324,550 & \$ 743,030 \\ \hline \multicolumn{5}{|l|}{2.2 . } \\ \hline \multicolumn{5}{|l|}{ Fixed Expenses: } \\ \hline Actvertising and marketing & 2175 & 2393 & 2632 & 7201 \\ \hline Insurance & 5.439 & 5962 & 6.581 & 18.001! \\ \hline Kitchen equipment ( $300) & 21,754 & 23929 & 26.322 & 72006 \\ \hline Rent & 15228 & 16.751 & 18.426 & 50.404 \\ \hline Uslities (electrioity, gass, water and belephone) & 10.877 & 11,965 & 13.161! & 36,003 \\ \hline Total fixed expenses & 55,473 & \$s 61,020 & \$\$ 67,122 & $ \\ \hline Total Various and Fixed Expenses & $220,983 & $313,989 & $391,672 & $926,644 \\ \hline Net ProfitLcoss & (3,443) & \$ 103,557 & $184,391 & $284,506 \\ \hline \end{tabular}