Question

In: Finance

I want to operate a HOT DOG cart. I wish to write a base case scenario...

I want to operate a HOT DOG cart. I wish to write a base case scenario so that bankers can make a loan.

Facts

I own land -- $ 70,000. I intend to keep it. Land will need clean-up at the end.

Clean up costs -- $ 2.500.

Equipment -- $ 25,000.

Installation costs -- $ 2,500.

Working Capital -- $ 2,000.

MACRS -- 5 year table

Life of project -- 6 years.

Variable costs -- 45%.

Fixed Costs -- $ 750.00 per month.

Tax rate -- 30%.

Sell 100 hot dogs a day @ $1/each

I want at least a 8% return on this project. Can you build an excel spread sheet for me to show that bankers that this is a viable business? Thank you.

Please help me compute:

Net Present Value (NPV).

Profitability Index (P.I.).

Internal Rate of return (IRR).

Modified Internal rate of Return (MIRR).

Payback.

Make sure your XL sheet is readable and the banker (ME) can see the results on the 1^st sheet.

Expert Solution

jeff jeffy answered 2 years ago

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