Calculate over 15 year-life Net Present Value? Internal rate of return? Payback Period? Jonathan Lark's lifelong dream
Fantastic news! We've Found the answer you've been seeking!
Question:
Calculate over 15 year-life
Net Present Value?
Internal rate of return?
Payback Period?
Transcribed Image Text:
Jonathan Lark's lifelong dream is to own a restaurant. He owns a premium site for a restaurant across the street from the local university. Now he needs to decide what kind of restaurant to open. Recently, Jonathan began to investigate one of the fastest-growing fast-food franchises in the country, Pepper Roni Pizza. A Pepper Roni Pizza franchise costs $54,000, an amount that is amortized over 15 years. As a franchisee, Jonathan would need to adhere to the company's building specifications. The building would cost an estimated $810,000 and would have a $90,000 salvage value at the end of its 15-year life. The restaurant equipment (fryers, steam tables, booths, counters) is sold as a package by the corporate office at a cost of $170,000, will have a salvage value of $18,000 at the end of its five-year life, and must be replaced every five years. Jonathan estimates the annual revenue from a Pepper Roni Pizza franchise at $1,710,000. Food costs typically run 36% of revenue. Annual operating expenses, not including depreciation, total $765,000. For financial reporting purposes, Jonathan will use straight- line depreciation and amortization. Based on past experience, he uses an 16% discount rate. Jonathan Lark's lifelong dream is to own a restaurant. He owns a premium site for a restaurant across the street from the local university. Now he needs to decide what kind of restaurant to open. Recently, Jonathan began to investigate one of the fastest-growing fast-food franchises in the country, Pepper Roni Pizza. A Pepper Roni Pizza franchise costs $54,000, an amount that is amortized over 15 years. As a franchisee, Jonathan would need to adhere to the company's building specifications. The building would cost an estimated $810,000 and would have a $90,000 salvage value at the end of its 15-year life. The restaurant equipment (fryers, steam tables, booths, counters) is sold as a package by the corporate office at a cost of $170,000, will have a salvage value of $18,000 at the end of its five-year life, and must be replaced every five years. Jonathan estimates the annual revenue from a Pepper Roni Pizza franchise at $1,710,000. Food costs typically run 36% of revenue. Annual operating expenses, not including depreciation, total $765,000. For financial reporting purposes, Jonathan will use straight- line depreciation and amortization. Based on past experience, he uses an 16% discount rate. Jonathan Lark's lifelong dream is to own a restaurant. He owns a premium site for a restaurant across the street from the local university. Now he needs to decide what kind of restaurant to open. Recently, Jonathan began to investigate one of the fastest-growing fast-food franchises in the country, Pepper Roni Pizza. A Pepper Roni Pizza franchise costs $54,000, an amount that is amortized over 15 years. As a franchisee, Jonathan would need to adhere to the company's building specifications. The building would cost an estimated $810,000 and would have a $90,000 salvage value at the end of its 15-year life. The restaurant equipment (fryers, steam tables, booths, counters) is sold as a package by the corporate office at a cost of $170,000, will have a salvage value of $18,000 at the end of its five-year life, and must be replaced every five years. Jonathan estimates the annual revenue from a Pepper Roni Pizza franchise at $1,710,000. Food costs typically run 36% of revenue. Annual operating expenses, not including depreciation, total $765,000. For financial reporting purposes, Jonathan will use straight- line depreciation and amortization. Based on past experience, he uses an 16% discount rate. Jonathan Lark's lifelong dream is to own a restaurant. He owns a premium site for a restaurant across the street from the local university. Now he needs to decide what kind of restaurant to open. Recently, Jonathan began to investigate one of the fastest-growing fast-food franchises in the country, Pepper Roni Pizza. A Pepper Roni Pizza franchise costs $54,000, an amount that is amortized over 15 years. As a franchisee, Jonathan would need to adhere to the company's building specifications. The building would cost an estimated $810,000 and would have a $90,000 salvage value at the end of its 15-year life. The restaurant equipment (fryers, steam tables, booths, counters) is sold as a package by the corporate office at a cost of $170,000, will have a salvage value of $18,000 at the end of its five-year life, and must be replaced every five years. Jonathan estimates the annual revenue from a Pepper Roni Pizza franchise at $1,710,000. Food costs typically run 36% of revenue. Annual operating expenses, not including depreciation, total $765,000. For financial reporting purposes, Jonathan will use straight- line depreciation and amortization. Based on past experience, he uses an 16% discount rate. Jonathan Lark's lifelong dream is to own a restaurant. He owns a premium site for a restaurant across the street from the local university. Now he needs to decide what kind of restaurant to open. Recently, Jonathan began to investigate one of the fastest-growing fast-food franchises in the country, Pepper Roni Pizza. A Pepper Roni Pizza franchise costs $54,000, an amount that is amortized over 15 years. As a franchisee, Jonathan would need to adhere to the company's building specifications. The building would cost an estimated $810,000 and would have a $90,000 salvage value at the end of its 15-year life. The restaurant equipment (fryers, steam tables, booths, counters) is sold as a package by the corporate office at a cost of $170,000, will have a salvage value of $18,000 at the end of its five-year life, and must be replaced every five years. Jonathan estimates the annual revenue from a Pepper Roni Pizza franchise at $1,710,000. Food costs typically run 36% of revenue. Annual operating expenses, not including depreciation, total $765,000. For financial reporting purposes, Jonathan will use straight- line depreciation and amortization. Based on past experience, he uses an 16% discount rate. Jonathan Lark's lifelong dream is to own a restaurant. He owns a premium site for a restaurant across the street from the local university. Now he needs to decide what kind of restaurant to open. Recently, Jonathan began to investigate one of the fastest-growing fast-food franchises in the country, Pepper Roni Pizza. A Pepper Roni Pizza franchise costs $54,000, an amount that is amortized over 15 years. As a franchisee, Jonathan would need to adhere to the company's building specifications. The building would cost an estimated $810,000 and would have a $90,000 salvage value at the end of its 15-year life. The restaurant equipment (fryers, steam tables, booths, counters) is sold as a package by the corporate office at a cost of $170,000, will have a salvage value of $18,000 at the end of its five-year life, and must be replaced every five years. Jonathan estimates the annual revenue from a Pepper Roni Pizza franchise at $1,710,000. Food costs typically run 36% of revenue. Annual operating expenses, not including depreciation, total $765,000. For financial reporting purposes, Jonathan will use straight- line depreciation and amortization. Based on past experience, he uses an 16% discount rate. Jonathan Lark's lifelong dream is to own a restaurant. He owns a premium site for a restaurant across the street from the local university. Now he needs to decide what kind of restaurant to open. Recently, Jonathan began to investigate one of the fastest-growing fast-food franchises in the country, Pepper Roni Pizza. A Pepper Roni Pizza franchise costs $54,000, an amount that is amortized over 15 years. As a franchisee, Jonathan would need to adhere to the company's building specifications. The building would cost an estimated $810,000 and would have a $90,000 salvage value at the end of its 15-year life. The restaurant equipment (fryers, steam tables, booths, counters) is sold as a package by the corporate office at a cost of $170,000, will have a salvage value of $18,000 at the end of its five-year life, and must be replaced every five years. Jonathan estimates the annual revenue from a Pepper Roni Pizza franchise at $1,710,000. Food costs typically run 36% of revenue. Annual operating expenses, not including depreciation, total $765,000. For financial reporting purposes, Jonathan will use straight- line depreciation and amortization. Based on past experience, he uses an 16% discount rate. Jonathan Lark's lifelong dream is to own a restaurant. He owns a premium site for a restaurant across the street from the local university. Now he needs to decide what kind of restaurant to open. Recently, Jonathan began to investigate one of the fastest-growing fast-food franchises in the country, Pepper Roni Pizza. A Pepper Roni Pizza franchise costs $54,000, an amount that is amortized over 15 years. As a franchisee, Jonathan would need to adhere to the company's building specifications. The building would cost an estimated $810,000 and would have a $90,000 salvage value at the end of its 15-year life. The restaurant equipment (fryers, steam tables, booths, counters) is sold as a package by the corporate office at a cost of $170,000, will have a salvage value of $18,000 at the end of its five-year life, and must be replaced every five years. Jonathan estimates the annual revenue from a Pepper Roni Pizza franchise at $1,710,000. Food costs typically run 36% of revenue. Annual operating expenses, not including depreciation, total $765,000. For financial reporting purposes, Jonathan will use straight- line depreciation and amortization. Based on past experience, he uses an 16% discount rate. Jonathan Lark's lifelong dream is to own a restaurant. He owns a premium site for a restaurant across the street from the local university. Now he needs to decide what kind of restaurant to open. Recently, Jonathan began to investigate one of the fastest-growing fast-food franchises in the country, Pepper Roni Pizza. A Pepper Roni Pizza franchise costs $54,000, an amount that is amortized over 15 years. As a franchisee, Jonathan would need to adhere to the company's building specifications. The building would cost an estimated $810,000 and would have a $90,000 salvage value at the end of its 15-year life. The restaurant equipment (fryers, steam tables, booths, counters) is sold as a package by the corporate office at a cost of $170,000, will have a salvage value of $18,000 at the end of its five-year life, and must be replaced every five years. Jonathan estimates the annual revenue from a Pepper Roni Pizza franchise at $1,710,000. Food costs typically run 36% of revenue. Annual operating expenses, not including depreciation, total $765,000. For financial reporting purposes, Jonathan will use straight- line depreciation and amortization. Based on past experience, he uses an 16% discount rate. Jonathan Lark's lifelong dream is to own a restaurant. He owns a premium site for a restaurant across the street from the local university. Now he needs to decide what kind of restaurant to open. Recently, Jonathan began to investigate one of the fastest-growing fast-food franchises in the country, Pepper Roni Pizza. A Pepper Roni Pizza franchise costs $54,000, an amount that is amortized over 15 years. As a franchisee, Jonathan would need to adhere to the company's building specifications. The building would cost an estimated $810,000 and would have a $90,000 salvage value at the end of its 15-year life. The restaurant equipment (fryers, steam tables, booths, counters) is sold as a package by the corporate office at a cost of $170,000, will have a salvage value of $18,000 at the end of its five-year life, and must be replaced every five years. Jonathan estimates the annual revenue from a Pepper Roni Pizza franchise at $1,710,000. Food costs typically run 36% of revenue. Annual operating expenses, not including depreciation, total $765,000. For financial reporting purposes, Jonathan will use straight- line depreciation and amortization. Based on past experience, he uses an 16% discount rate.
Expert Answer:
Answer rating: 100% (QA)
Building Cost 81000000 1 Year Franchise Cost Equipment Annual Revenue Foods Cost Expense Net Cashflo... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
At the end of its first year of operations, Brianna Company chose to use the revaluation framework allowed under IFRS. Briannas ledger shows Plant Assets $480,000 and Accumulated DepreciationPlant...
-
At the end of its first year of operation, Jane Corporation has $1,000,000 of common stock and net income of $216,000. Prepare (a) The closing entry for net income and (b) The stockholders equity...
-
At the end of its first year of operation, Jaeger Corporation has $1,000,000 of common stock and net income of $228,000. Prepare (a) The closing entry for net income (b) The stockholders' equity...
-
Let y vary directly with x. Complete the following. Find y when x = 1.3, if y = 7.2 when x = 5.2.
-
An executive is reluctant to sell a high-performing business unit, arguing that the sale would dilute the companys ROIC to a level below the WACC and make the company value-destroying. Discuss.
-
Use a standard monopoly firm graph to show and explain how the monopoly power of a team is changed when another team locates nearby.
-
Use Laplace transforms to sum the following series or write as a single integral. a. \(\sum_{n=0}^{\infty} \frac{(-1)^{n}}{1+2 n}\). b. \(\sum_{n=1}^{\infty} \frac{1}{n(n+3)}\). c....
-
Alternative allocation bases for a professional services firm. The Walliston Group (WG) provides tax advice to multinational firms. WG charges clients for (a) Direct professional time (at an hourly...
-
Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. Sales price Variable costs Fixed costs $ 16 per unit 9 per unit 27,000 per...
-
Buhler Industries is a farm implement manufacturer. Management is currently evaluating a proposal to build a plant that will manufacture lightweight tractors. Buhler plans to use a cost of capital of...
-
The adjusted trial balance for Chiara Company as of December 31 follows. Cash $ 199,100 Accounts receivable 51,000 Interest receivable 19,000 Notes receivable (due in 90 days) 171,500 Office supplies...
-
Sherritt's five-year borrowing rate is 43.171% and the Government of Canada is 1.47%. Which would you prefer? $500 from Sherritt paid today or a promise that the firm will pay you $800 in five years?...
-
A constant voltage of 3.00 V has been observed over a certain time interval across a 2.20 H inductor. The current through the inductor, measured as 1.00 A at the beginning of the time interval, was...
-
Bill 21 affirms that Qubec is "a lay State" (s. 1), and reaffirms the laicity of the State based on the four following foundational principles (s. 2): The separation of State and religions; The...
-
Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of...
-
4. CALCULATE ABOU FORCE PORTA = 0 1+ N I SUCH THAT THE ADDION OF ALL DONEMS TORN F GKN t A Ser +2m/2m 4n SEN
-
need help woth requirment #3 and #6 please thank you!! Requilred: 1. Compute the total cost per equivalent unit for the month 2 Compute the equivalent units of matertal and conversion in the ending...
-
Multiple Choice Questions: 1. The largest component of aggregate demand is? a. Government purchases. b. Net exports. c. Consumption. d. Investment. 2. A reduction in personal income taxes, other...
-
A corporate board of directors consisting of 15 persons is to form a subcommittee of 5 persons to examine an environmental issue currently facing the firm. How many different subcommittees are...
-
The personnel director for a large firm selects a random sample consisting of 100 clerical employees, then finds out whether they have been with the firm for more than 5 years and how many shares of...
-
For the period 20012008, the Bristol-Myers Squibb Company, Inc. reported the following amounts (in billions of dollars) for (1) net sales and (2) advertising and product promotion. The data are also...
-
Do the same as in Problem 7 but for the expression \(\left\langle u\left(a u+v^{2} ight) ightangle\).
-
\(u(\boldsymbol{x}, t)\) and \(v(\boldsymbol{x}, t)\) are velocity components of a turbulent flow. The RANS averaging \(\langle v(a u+b)angle\) is evaluated, where \(a\) and \(b\) are some constants....
-
If the terms such as those in Problems 7 and 8 appear in the flow equations solved by an RANS method, do they need closure models? Explain your answer.
Study smarter with the SolutionInn App