Italian Valley Restaurant

Having assessed the changing dietary needs of your town, you are considering investing in a new Italian

restaurant which you plan to name Italian Valley. The restaurant will feature live musicians, appetizers,

and a stocked bar. You are trying to assess the likely profitability of this business venture. As a new

graduate of the UWI your first step is to prepare a complete capital budgeting analysis for the 5 years you

plan to operate the restaurant before you sell it.

Having spoken with local vendors, other restaurant owners, bankers, and builders you collected the

following data and information about the proposal.

You plan to use a building currently owned by your family, however there will be need for some renovation

and improvements to the property. Your parents have said that you can use the retail space in any way

you wish for free. After checking on local lease rates you determine this space would lease for $75,500

per year. Your family also owns another restaurant downtown. You predict that your new one will

decrease its revenues by $15,000 per year. Your parents tell you that this sum will be taken from your

annual family stipend.

Some of the major improvements to the property include the purchase of cooking equipment, building a

stage, seating, and interior décor. The construction is estimated to cost $1.75 million. An additional

$375,000 will be spent on chairs, tables, bar equipment, and decorations. Depreciation will be over 7

years using MACRS*. You determine that you will require an average cash balance of $15,000 and

inventory of $20,000. Accounts payable should average $10,000. Your local bank has agreed to loan you

monies to pay for these expenses at a 15% interest rate.

You plan to hire a research consultant to conduct a market study, since you believe your chances of

success will increase with greater information about the restaurant market. The charge for this report

will be $200,000.

Revenues are estimated to be $600,000 the first year. Revenues are expected to increase by 20% the

second year, 15% the third year, and continue increasing at 8% thereafter. Fixed annual operating costs

are estimated to be as follows.

Employee salaries = $110,000;

Heat, electricity, water, and janitorial services =$75,000.

The food and liquor bill is expected to be 15% of revenues. Total taxes are estimated to be 40% of net

revenues.

Your plan is to run the bar for 5 years, then to sell it to an investor for $2,000,000.

Required:

1. Prepare a cash flow analysis which includes:

a. the initial investment, ( 5 points)

b. the annual net cash flows, and (46 points)

c. the terminal cash flow. (7 points)

2. What is the Net Present Value (NPV) and Internal Rate of Return (IRR) of this venture? (5 points)

3. Should you invest in this venture and why? (2 points)

(TOTAL 65 POINTS)

Clearly SHOW ALL WORKING in a table format in either Microsoft Excel or Word. Ensure that your table

shows all relevant cash flows such as initial investment flows, Revenue, Expenditure, Depreciation,

Taxes, terminal year cash flows from year 0 to end of project life.

*MACRS Depreciation Table

MACRS Depreciation Table

Individual Assignment Rubric

1. Prepare a cash flow analysis which includes:

a. the initial investment, (includes purchase price 2 points; NWC 2 points; total costs 1

point) ( 5 points)

b. the annual net cash flows, (includes Revenues 5 points; Breakdown of all expenses 6

points; total operating expenses 5 points; depreciation 5 points; Earnings Before Taxes 5

points; Taxes 5 points; Earnings After Taxes 5 points; Depreciation Add back 5 points)

(46 points)

c. the terminal cash flows (include taxes on sale 5 points, NWC 1 point, Terminal Sale 1

point) (7 points)

2. Correct Calculation of Net Present Value (NPV) (3 points) ; Correct Calculation of Internal Rate of

Return (IRR) (2 points) (5 points)

3. Correct decision to invest in this venture and why?

1. You operate several BurgerStands distributed throughout town. Define a class named BurgerStand that has a member variable for the burger stand's id number and member variable for how many burgers that stand sold that day.

1. create a constructor that allows user of the class to initialize values for id number and for how many burgers sold that day and a destructor
2. create a function named justsold that show increments of the number of burgers the stand has sold by one. (This function will invoked each time the stand sells a burger so that you can track the total number of burgers sold by the stand. And returns the number of burgers sold.)
3. create a function that calculate the total number of burgers sold by all stands.
4. write in a data file, the list of burger stands and the total number of burgers sold by all stands.

#python

Perfect Properties have collected sales data from property sales in the northern suburbs of Cape Town for the past month. In the table below you are supplied with the selling price (SP) of the house in Rand, the size of the plot in m² (P) as well as the size of the house, also in m² (H). They are interested in understanding which of these two factors influence the selling price.

Use the data in the sheet named “Perfect” and answer the following questions:

1. Decide which linear regression model (with size of plot (P) or size of house (H) or both as independent variable) is the better model in explaining the behaviour of selling prices (SP) and motivate your selection.

The remaining answers must be based on the model that you have selected.

2. What is the total variation in “Selling Price” that is explained by the independent variable(s) that you have selected?
3. Is the overall regression model statistically significant? Test at the 5% level of significance using the model that you have selected in a. For this test formulate the appropriate null and alternative hypothesis, determine the region of acceptance, use the appropriate test statistic and draw the statistical and management conclusions.
4. Write down the linear regression equation in algebraic format using SP for Selling price, P for plot size and H for the size of the house.
5. Compute the expected Selling price for a house that stands on a plot of 1500 m² and has a house that covers 245 m².

Compute the 95% confidence interval of the mean expense for a house that stands on a plot of 1500 m² and has a house that covers 245 m².

1.A 1000 ephemeral stream segment along the Town Creek near Tupelo, MS has a width of 30-m. The difference in elevation of the bottom channel for the upstream to the downstream section is 0.5m. A triangular hydrograph cumulating 10-cm of runoff that begins at 0m3/s reaches a peak of 35m3/s after the first hour of flow and returns to 0m3/s at the time 2.8-hr.If no lateral or overbank inflow is observed along the reach:

a.(15pts) Compute the outflow hydrograph for this reach selecting a time step of 0.1hr, a travel time constant of 0.285 hr and a weighting factor o f0.35.(use 4 decimal places for the outflow hydrograph to determine the routing time to reach the 0m3/s)(As you could submit your routingin Excel, hand/typing calculation are required for the time step that corresponds to your last digit of the net id. If 0 then 10th time step)Hint: The inflow hydrographs should have time steps of 0.1-hr from the beginning to the end.

b.(5 pts) Determine the lag time and peak flow attenuation(difference) observed between inflow and outflow hydrographs.

c.(15pts) Assuming the routing parameters remain constant, compute the outflow hydrograph for the following 1000-m reach segment.(use 4 decimal places for the outflow hydrograph to determine the routing time to reach the 0m3/s)(As you could submit your routing in Excel, hand/typing calculation sare required for the time step that corresponds to your last digit of the net id. If 0 then 10th time step

d.(5 pts) Determine the lag time and peak flow attenuation(difference) observed between inflow and outflow hydrographs.e.(5 pts) Is the runoff volume and the runoff depth changing along the reach? Validate your response with proper calculations and demonstrations.

f.(5 pts) Plot all three hydrographs in one same graph.

A semiprofessional baseball team near your town plays two home games each month at the local baseball park. The team splits the concessions 50/50 with the city but keeps all the revenue from ticket sales. The city charges the team $500  each month for the three-month season. The team pays the players and manager a total of $2500 each month. The team charges $10 for each ticket, and the average customer spends $7 at the concession stand. Attendance averages 100 people at each home game.

Part 1. The team earns an average of $________________ in revenue for each game and $______________ of revenue each season.

With total costs of $_____________ each season, the team finishes the season with $________________ of profit.

Part 2   In order to break even, the team needs to sell   tickets for each game. Round to the nearest whole number.

4. A small town has been cryogenically frozen since 2014.When they thaw out, they want to know how their tax rates have changed after the Tax Cuts and Jobs Act of 2017. In all cases assume the standard deduction is taken and personal exemptions are taken for everyone in the household.a. Mo earns $90,000. He is a single filer. What is his average tax rate in 2014 versus in 2019?b. Elaina earns $90,000. She is married, and files as a married couples filing jointly with her spouse who earns no income. What is her average tax rate in 2014 versus in 2019? c.Meriam earns $90,000. She files as a head of household with four dependents. What is her average tax rate in 2014 versus in 2019?d. Based on this example, what demographic has benefitted the most from the changes in the Tax Cuts and Jobs Act of 2017?

You are a second year student in Prestige Open University. The recent pandemic, Covid-19, has forced your university to move lessons online. This change brought about relief to some students but also some challenges to others. As a second year student, you have decided to write a proposal to the dean of the school to highlight the problems faced and suggest some possible solutions.

In your proposal to the dean of the school,
 state the purpose of your proposal;
 suggest two (2) problems that you faced while attending classes online;
 suggest two (2) solutions to overcome those problems; and
 describe the benefits of those suggestions to the students.

Your proposal should be about 600-800 words.

1. A researcher is interested in finding out if college-bound high school students tend to smoke cigarettes less than high school students who are not college-bound. He distributes a questionnaire and finds that for a group of 57 college-bound students, the mean number of cigarettes smoked per week is 4.0 with a standard deviation of 2.0. For 36 non-college-bound students, he finds that the mean number of cigarettes smoked per week is 9.0 with a standard deviation of 3.0. A. What is the null hypothesis? B. What is the alternative hypothesis? C. What is the t value? (Be sure to show your work.) D. Using your table, is the difference between these groups statistically significant at the 0.05 level?

Question 4)

Schools in Indonesia regularly measure the height and weight of primary school kids to compute their body mass index (BMI) in evaluating potential problems with their health. Heights of primary school kids in Indonesia are normally distributed with a mean of 125cm and a standard deviation of 15cm.

a) Find the probability that a randomly selected kid would have a height more than 142cm. Display working.

b) Find the probability that the mean height for five randomly selected kids is less than 128cm. Display working.

c) Six kids are randomly selected. What is the probability that their mean height is between 120cm and 125cm? Display working.

d) Find the cut off height for the 3% shortest kids. Display working.

Schools in Indonesia regularly measure the height and weight of primary school kids to compute their body mass index (BMI) in evaluating potential problems with their health.
Heights of primary school kids in Indonesia are normally distributed with a mean of 125cm and a standard deviation of 15cm.

a) Find the probability that a randomly selected kid would have a height more than 142cm. Display working.

b) Find the probability that the mean height for five randomly selected kids is less than 128cm. Display working.

c) Six kids are randomly selected. What is the probability that their mean height is between 120cm and 125cm? Display working.

d) Find the cut off height for the 3% shortest kids. Display working.