You have decided that there are not enough beer varieties in the world, and that you are only who can fix this problem. Against the urging of your spouse and friends, you decide to open up a brewery. You have two options: build your own brewery from the ground up or buy an existing one from a fellow dreamer like yourself who has become disillusioned with the business. The existing brewery will need some new equipment and repairs before it can be returned to operation. You must decide whether it is a better investment to build or buy.

Estimate Buy Costs

You need to estimate the total cost to purchase the existing brewery up and get it up and running. The owner is asking $1,000,000 for the brewery. You want to increase the production capacity of the brewery by 500 barrels/month which will require another 5 fermentation tanks. The fermentation tanks cost $10,000 each. In addition to the cost of the fermentation tanks, the company that installs them says they only work on time and materials contract basis and that their last job was half this size and cost was $150,000. Since then, he says his costs have increased 20%. 

What is the best estimate of how much it will cost to purchase and upgrade the existing brewery?

Answer rating: 100% (QA)

To estimate the cost of purchasing and upgrading the existing brewery lets break down the expenses 1 ... View the full answer