You've finally pulled decided you've had enough of these zoom classes too boring - no more! After going to that hell known as Chuck-E-Cheese for your nephew's birthday party, you've decided to take the plunge and open --- a fun restaurant for kids! You will name it "Pennywise's Fun Food House 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 and you have to pay them (your family and friends) back by end of 4 years (at 12% p.a.). After doing so late night guesstimates, you figure that it will cost you $165,000 to start up with rent, deposits, equipment, salaries, pizza dough, balloons, arcade games, etc., etc. for the first year, but you expect to make gross revenue of $56357.14, $56,441.33, and 64,828.94 in the following 3 years and net income of 13620, 3300 and 29100 in those 3 years. Your palms are sweaty, mom's green pizza, should you do it [1]? Fortunately, you've been awake for the FIN 302 class last week and decide to look at it from a FIN 302 perspective and use the tools and relevant formulas) you learned there. You recall there were 5 tools... Describe each of 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]? Remember what I said in class You've finally pulled decided you've had enough of these zoom classes too boring - no more! After going to that hell known as Chuck-E-Cheese for your nephew's birthday party, you've decided to take the plunge and open --- a fun restaurant for kids! You will name it "Pennywise's Fun Food House 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 and you have to pay them (your family and friends) back by end of 4 years (at 12% p.a.). After doing so late night guesstimates, you figure that it will cost you $165,000 to start up with rent, deposits, equipment, salaries, pizza dough, balloons, arcade games, etc., etc. for the first year, but you expect to make gross revenue of $56357.14, $56,441.33, and 64,828.94 in the following 3 years and net income of 13620, 3300 and 29100 in those 3 years. Your palms are sweaty, mom's green pizza, should you do it [1]? Fortunately, you've been awake for the FIN 302 class last week and decide to look at it from a FIN 302 perspective and use the tools and relevant formulas) you learned there. You recall there were 5 tools... Describe each of 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]? Remember what I said in class
