Youve finally pulled decided youve had enough of these 8AM classes no more! After seeing all those TV shows like Masterchef, Hells Kitchen, etc., youve decided to take the plunge and open --- a fast food fusion Thai restaurant next door to Mr. Taco across the street from CSUSM. Now you got from friends and family some capital but you also need to stay above water with student and other loans which are averaging 12% p.a., overall and you have to pay them back by end of 4 years. After doing so late night guesstimates, you figure that it will cost you $165,000 to start up with rent, deposits, equipment, salaries, chicken, basil, rice, etc., etc. for the first year, but you expect to make gross revenue of $63120, $70800, and $91080 in the following 3 years and net income of $13620, $3300 and $29100 in those 3 years. Your palms are sweaty, moms green curry, should you do it [1]?

Fortunately, youve been awake for FIN 302 and decide to look at it from a Capital Budgeting and Project Investment perspective and use the tools (and relevant formulas) you learned there. Describe the tools or rules [2], apply it to this situation [3], describe the pros and cons of each tool [4], when they may be good and when they may be unreliable. [5].

Finally, out of the blue, the friendly neighborhood bank says it can give you a loan for up to $165,000 at an interest rate of 12% as long as you pay it back at in 4 years. Should you do it [5]? How much to borrow --- or better to not to borrow at all [6]? You dont need to know the specific numbers necessarily, but what kinds of tools and techniques should help you in framing your decision-making?