### Goal Kick Sports New Store Financial Model #### Parameters - **Store Size (square feet):** 7,500 - **Total Fixed Assets:** $280,000 - **Straight Line Depreciation Period:** 10 years - **Discount Rate:** 10% - **Tax Rate:** 33% - **Inflation Rate:** 3% - **Cost of Merchandise (% of sales):** 28% - **First Year Sales Revenue:** $950,000 - **Annual Growth Rate of Sales:** 15% #### Operating Expenses - **Rent Per Square Foot:** $30 - **Labor Cost:** $150,000 - **Other Expenses:** $235,000 --- ### Model | Year | 1 | 2 | 3 | 4 | 5 | |------------------------------|-----------|-----------|-----------|-----------|-----------| | **Sales Revenue** | $950,000 | $1,092,500| $1,256,375| $1,444,831| $1,661,556| | **Cost of Merchandise** | $266,000 | $305,900 | $351,785 | $404,483 | $465,236 | | **Labor Cost** | $150,000 | $172,500 | $198,375 | $228,131 | $262,351 | | **Rent** | $225,000 | $225,000 | $234,000 | $234,000 | $243,547 | | **Other Expenses** | $235,000 | $235,000 | $242,050 | $242,050 | $249,372 | | **Net Operating Income** | $74,000 | $164,100 | $269,946 | $392,942 | $536,037 | | **Depreciation Expense** | $28,000 | $28,000 | $28,000 | $28,000 | $28,000 | | **Net Income Before Tax** | $18,000 | $108,000 | $213,946 | $336,942 | $480,037 | | **Income Tax** | $ **DATAFILE: GoalKick** **Gold Kick Sports (GKS)** is a retail chain that sells youth and adult soccer equipment. The GKS financial planning group has developed a spreadsheet model to calculate the net discounted cash flow of the first five years of operations for a new store. This model is used to assess new locations under consideration for expansion. **(a)** Use Excel’s Formula Auditing tools to audit the model and correct any errors found. What is the total discounted cash flow (in dollars) calculated by the corrected spreadsheet? (Round your answer to the nearest dollar.) **Answer:** [Your Calculated Value] **(b)** Once you are comfortable that the model is correct, use Scenario Manager to generate a Scenario Summary report that gives Total Discounted Cash Flow for the following scenarios: | | Scenario | |------------------|----------------| | | 1 | 2 | 3 | 4 | | **Tax Rate** | 32% | 24% | 37% | 24%| | **Inflation Rate**| 3% | 4% | 2% | 4% | | **Annual Growth of Sales** | 26% | 26% | 26% | 24% | What is the range of values for the Total Discounted Cash Flow (in dollars) for these scenarios? (Round your answer to the nearest dollar.) **Need Help?** - **Reset** The table presented is a Scenario table, which includes four different scenarios with varying tax rates, inflation rates, and annual growth of sales. These variables are essential factors in calculating the net discounted cash flow, which helps in assessing the financial viability of opening new store locations.