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
| Year | 3-Year | 5-Year |
| 1 | 33.33% | 20.00% |
| 2 | 44.45% | 32.00% |
◦ $357,752
◦ $68,600
◦ $50,000
◦ $214,880
◦ $432,880
Phylogeny based on the FIT2 gene
Trilobite hypostome types based on attachment
Opening to Eustachian
Setup used to check the opening temperature of a thermostat.
An electrochemical cell is based on these two half-reactions
Vision-based Magnetic Compass in European Robins