you are to find a business for sale, project the cash flows, and calculate the NPV to determine whether the business is worth buying based on NPV and your overall evaluation. You may wish to visit a business broker website as they list businesses for sale, usually provide latest year cash flow and the price of the business. You need to:

1. Qualitatively assess the business. Why is it viable in the long run? If its not then choose another business as why would you perform a valuation and evaluation of a business you thought was not viable?

2. Predict cash flows based on your assessment of the business, changes you would make if any and how they affect CF's. You can also choose a growth rate to predict CF's but you have to justify the choice of g.

3. Choose a discount rate (k).

4. Calculate PV, NPV and IRR.

5. Make a recommendation on the business decision.

Business info listed below:

Asking Price:$425,000

Cash Flow:$237,000

Gross Revenue:$859,000

EBITDA:N/A

FF&E:$350,000

Inventory:$35,000

Rent:$3,900 /Month

Established:1989

Business Description

SPANISH RESTAURANT Business/Liq. License only 30 years

Traditional Spanish Restuarant (white Table Cloth) for over 30 years, with Full Bar, Bar Area, Dinning Room, occupancy 150, Full Kitchen and enormous basement for storage- A MUST SEE! Go only with Broker for a showing. Owner Operator will entertain a Sale of Real Estate and business for $1,200,000

Detailed Information

Location:

Hawthorne, NJ

Inventory:

Included in asking price

Real Estate:

Leased

Building SF:

3,500

Lease Expiration:

7/1/2039

Employees:

8

Furniture, Fixtures, & Equipment (FF&E):

Included in asking price

Facilities:

Commercial Restaurant Building, Class C Liquor License, Bar Room, Dinning Room, Parking along with addition Adjacent Parking, Full Service Kitchen, Ansul system, POS Systems, Full camera system and Alarmed. Lot Size 9,374 square feet with great building.

Competition:

No Spanish restaurants in Town or the surrounding area, Business is on a busy road. Place is in business for over 30 years! Hundreds of thousands of people are in the surrounding area.

Growth & Expansion:

Adjacent parking lot is next door, and must be used to Accommodate parking demands. Passaic River is adjacent. Can transform upstairs apartment into party room!

Financing:

225,000

Support & Training:

Owner to stay on 1 week post closing for transition

Reason for Selling:

Owner Retiring after 30 years in business