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Author Question: After a trip to Bordeaux France you are considering opening a restaurant based on Restaurant ... (Read 28 times)

Sportsfan2111

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on: Apr 25, 2021
After a trip to Bordeaux France you are considering opening a restaurant based on Restaurant L'Entrecote. You will offer a fixed menu of salad, steak and French fries. Your innovation is that you will use a bordelaise (red wine) sauce instead of a tarragon butter sauce. You plan to run the restaurant for two years and then retire. Start-up costs, to be incurred immediately, are $500,000. Start-up costs include kitchen equipment, kitchen supplies, renovations, furniture, fixtures, and the point-of-sales system. Assume that all of those assets are classified as 5-year property. The assets can be sold for $150,000 after two years.
You expect 100 diners per night. The restaurant will be open for 300 nights per year. The average diner orders food with a menu price of $35 and beverages with a menu price of $15. Food costs are 34% of the menu price and beverage costs are 50% of the menu price. The nightly wages are $2,160 (for the chef, 5 kitchen staff, a bartender, the Maitre d' and 10 wait staff). Municipal tax, rent, and utilities, are $41,400 per annum. Assume that all revenues and operating expenses are received (paid) at the end of each year. The small business tax rate is 20%. The cost of capital is 10%. When the restaurant opens you will have to invest in an inventory of wine, beer and liquor costing $50,000. What are the terminal year cash flows? 

MACRS Depreciation Rates
Year3-Year5-Year
133.33%20.00%
244.45%32.00%

◦ $357,752
◦ $68,600
◦ $50,000
◦ $214,880
◦ $432,880
Corporate Finance Online ¦ Eakins, McNally ¦ 2nd Edition
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Marked as best answer by Sportsfan2111 on Apr 25, 2021

zoeyesther

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Reply #1 on: Apr 25, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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Sportsfan2111

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Reply 2 on: Apr 25, 2021
Great answer, keep it coming :)

mammy1697

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Reply 3 on: Yesterday
Excellent

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