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 is the NPV for the proposed acquisition if the cost of capital is 12%?
MACRS Depreciation Rates
| Year | 3-Year | 5-Year |
| 1 | 33.33% | 20.00% |
| 2 | 44.45% | 32.00% |
◦ $102,880
◦ $(9,586)
◦ $(7,812)
◦ $432,880
◦ $128,600
Dogue de Bordeaux
Teaching methods based on patients developmental capacity
Treatment of Depression with Ketamine The graph shows the effects of ketamine on symptoms of depress
Ethnic Differences in Financial Support for College Based on a sample of 304 emerging adults aged 2
Gislebertus, Last Judgment, tympanum and lintel, west portal, cathedral, Autun, France.
Opening a Sterile Packet