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Optimistic initial year 10% more than realistic, with 7% annual growth 2005-06 2006-07 2007-08 2008-09 2004-05 Sales 1.431.000 1.531,000 1.638,000 1,753,000 1,876.000 Realistic-Initial based on Safeco history, with a 1.5% annual growth 2004-05 2005-06 2006-07 2007-08 2008-09 Sales 1.301,000 1,321,000 1,341,000 1.361,000 1,381,000 Pessimistic-Initial year 80% of optimistic, with a 1% annual growth 2004-05 2005-06 2006-07 2007-08 2008-09 Sales 1,041,000 1.051.000 1.062,000 1,073,000 1,084,000 Operating Cost information Product costs 20% sales Includes material and labor Payment to Seahawks 40% sales Variable Selling, General and Admin 12% sales Does not include depreciation Selling General and Admin Supervisor, Ov168 300$ Assume 1.5% annual growth Does not include depreciation One Time Investment needed Menu, decorations 16,000 Ovens, fryers, refrigeration, gnl 54,000 Stainless tables & shelves 4,000 Exhaust Hood 30,000 Training program 2,500 Capital contribution calculate Payment from Ivar's to Seahawks for concession Assume 50% of first year's sales (will vary)-straight line-5 year 106,500 TOTAL Depreciable Costs Savage calculate of new squiome 500

Optimistic initial year 10% more than realistic, with 7% annual growth 2005-06 2006-07 2007-08 2008-09 2004-05 Sales 1.431.000 1.531,000 1.638,000 1,753,000 1,876.000 Realistic-Initial based on Safeco history, with a 1.5% annual growth 2004-05 2005-06 2006-07 2007-08 2008-09 Sales 1.301,000 1,321,000 1,341,000 1.361,000 1,381,000 Pessimistic-Initial year 80% of optimistic, with a 1% annual growth 2004-05 2005-06 2006-07 2007-08 2008-09 Sales 1,041,000 1.051.000 1.062,000 1,073,000 1,084,000 Operating Cost information Product costs 20% sales Includes material and labor Payment to Seahawks 40% sales Variable Selling, General and Admin 12% sales Does not include depreciation Selling General and Admin Supervisor, Ov168 300$ Assume 1.5% annual growth Does not include depreciation One Time Investment needed Menu, decorations 16,000 Ovens, fryers, refrigeration, gnl 54,000 Stainless tables & shelves 4,000 Exhaust Hood 30,000 Training program 2,500 Capital contribution calculate Payment from Ivar's to Seahawks for concession Assume 50% of first year's sales (will vary)-straight line-5 year 106,500 TOTAL Depreciable Costs Savage calculate of new squiome 500

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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2Qwest Field SALES FORECAST-3 SCENARIOS Optimistic initial year 10% more than realistic, with 7% annual growth 2004-05 2005-06 2006-07 2007-08 2008-09 & Sales 1,431.000 1.531,000 1,638,000 1,753,000 1,876.000 7 Realistic-Initial based on Safeco history, with a 1.5 % annual growth 2004-05 2005-06 2006-07 2007-08 2008-09 Sales 1.301,000 1,321,000 1,341,000 1,361,000 1,381,000 10 Pessimistic-Initial year 80% of optimistic, with a 1% annual growth 11 2004-05 2005-06 2006-07 2007-08 2008-09 12 Sales 1,041,000 1.051.000 1.062,000 1,073,000 1,084,000 13 Operating Cost information 34 Product costs 20% sales Includes material and labor 15 Payment to Seahawks 40% sales 36 Variable Selling, General and Admin 12% sales Does not include depreciation 17 Belling, General and Admin Supervisor, Ov168 3005 Assume 1.5% annual growth. Does not include depreciation 38 One Time Investment needed 19 Menu, decorations 20 Ovens, fryers, refrigeration, 21 Stainless tables & shelves 22 Exhaust Hood 23 Training program, 24 Capital contribution 16,000 gnil 54,000 4,000 30,000 2,500 TOTAL calculate Payment from Ivar's to Seahawks for concession. Assume 50% of first year's sales (will vary)-straight line-5 years. 100,500 as Depreciable Costs calculate Salvage value of new equipmei 8,500 28 Method: Straight Line, 5 year life, no deduction for salvage value, estimated cash proceeds from disposal will be treated as ordinary income. Other Information Income Tax Rate 31 Hurdle Rate (Cost of Capital) 32 Estimated major equipment repairs beg of year 3. Calculate the NPV of the realistic 35 30% 6% 50,000 Straight line 3 year, no salvage
Transcribed Image Text:2Qwest Field SALES FORECAST-3 SCENARIOS Optimistic initial year 10% more than realistic, with 7% annual growth 2004-05 2005-06 2006-07 2007-08 2008-09 & Sales 1,431.000 1.531,000 1,638,000 1,753,000 1,876.000 7 Realistic-Initial based on Safeco history, with a 1.5 % annual growth 2004-05 2005-06 2006-07 2007-08 2008-09 Sales 1.301,000 1,321,000 1,341,000 1,361,000 1,381,000 10 Pessimistic-Initial year 80% of optimistic, with a 1% annual growth 11 2004-05 2005-06 2006-07 2007-08 2008-09 12 Sales 1,041,000 1.051.000 1.062,000 1,073,000 1,084,000 13 Operating Cost information 34 Product costs 20% sales Includes material and labor 15 Payment to Seahawks 40% sales 36 Variable Selling, General and Admin 12% sales Does not include depreciation 17 Belling, General and Admin Supervisor, Ov168 3005 Assume 1.5% annual growth. Does not include depreciation 38 One Time Investment needed 19 Menu, decorations 20 Ovens, fryers, refrigeration, 21 Stainless tables & shelves 22 Exhaust Hood 23 Training program, 24 Capital contribution 16,000 gnil 54,000 4,000 30,000 2,500 TOTAL calculate Payment from Ivar's to Seahawks for concession. Assume 50% of first year's sales (will vary)-straight line-5 years. 100,500 as Depreciable Costs calculate Salvage value of new equipmei 8,500 28 Method: Straight Line, 5 year life, no deduction for salvage value, estimated cash proceeds from disposal will be treated as ordinary income. Other Information Income Tax Rate 31 Hurdle Rate (Cost of Capital) 32 Estimated major equipment repairs beg of year 3. Calculate the NPV of the realistic 35 30% 6% 50,000 Straight line 3 year, no salvage
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