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Investment Proposals for Orio Coffee House Daniel Jackson, CEO of OCH, has approached you to work on 2 investment proposals that the company is considering: 1. Buying coffee roaster plant in Mexico. 2. The Reconstruction of coffee shops to add the selling of yogurt. Mr. Daniel reminds you to consider only relevant expense and income. “Relevant costs have to be occurring in the future,”He said. “And have to be unique from the status quo. For example, if we choose to buy the roaster plant, it is only the incremental revenue and costs related to the purchase that should be considered. We also need to take into account the opportunity cost associated with the alternatives.” More details on both of investment proposal is written below. Mr. Daniel wants you to recommend after evaluation, if OCH should invest in one, both, or none of the investment proposals. Required Return Mr. Daniel wants you to use 7% as the discount rate (i.e., the required return). First Proposal of Investment in…

#15 Carni’s boss stated that after reviewing first quarter earnings, the company decided to invest in only one store in the city.  After evaluating the performance of the store, the company will determine if it wants to increase its presence in the area. a) If you were Carni, what method of evaluation would you use to recommend a site for a new video store? b) Explain how you would determine which site to invest in.

You are opening up a brand new retail strip mall. You presently have more potential retail outlets wanting to locate in your mall than you have space available. What is the most appropriate tool to use if you are trying to determine the optimal allocation of your retail space? A. payback period B. profitability index C. internal rate of return (IRR) D. discounted payback period O E. net present value (NPV)

First image is with the answers that are given and the questions scenarios . Second image is with more question scenarios . I need help and explanations on what answer to match with what scenarios .It’s about the best way for funding business in the given scenario

The owner of a small printing company is considering the purchase of additional printing equipment to expand her business. If the owner expands the business and sales are high, projected profits (minus the cost of the equipment) should be $90,000; if sales are low, projected profits should be $40,000. If the equipment is not purchased, projected profits should be $70,000 if sales are high and $50,000 if sales are low. Consider Decision Tree Analysis   If the owner is optimistic about the company's future sales, should the company expand by purchasing the equipment? Is the owner's optimism or pessimism about sales the only factor that may impact the company's profits?

The owner of a small printing company is considering the purchase of additional printing equipment to expand her business. If the owner expands the business and sales are high, projected profits (minus the cost of the equipment) should be $90,000; if sales are low, projected profits should be $40,000. If the equipment is not purchased, projected profits should be $70,000 if sales are high and $50,000 if sales are low. Consider Decision Tree Analysis Are there options other than the purchase of additional equipment that should be considered in making the decision to expand the business? The equipment to be purchased is known in the industry to have a useful life of five years. How might this impact the printing company?

Please look at image for the question, answer in excel and show steps please.

A refinisher of antiques named Constance has been so successful with her small business that she is planning to expand her shop. She is going to start enlarging her shop by purchasing the following equipment.(a) What would be the net cost to Constance to obtain this equipment? Assume that she can trade the old equipment in for 15% of its original cost. Assume there has been no inflation in equipment prices. (b) Suggest a green engineering approach to constance for disposing of the solvents and lacquers used in her business.

Mastery Problem: Capital Investment Analysis   HomeGrown Company HomeGrown Company is a chain of grocery stores that are similar to indoor farmer's markets, providing fresh, local produce, meats, and dairy products to consumers in urban areas. HomeGrown is considering opening several stores in a new city, and has proposals from three contractors (Alpha, Beta, and Gamma companies) who would like to provide buildings for the new stores. The amount of expected revenue from the stores will depend on the design of the contractor. For example, if HomeGrown decides on a more open floor plan, with less shelf space for products, revenue would be lower overall. However, if HomeGrown decides on a very crowded floor plan, it may lose customers who appreciate a more open feel. As the project manager for HomeGrown, you are responsible for deciding which if any of the proposals to accept. HomeGrown's minimum acceptable rate of return is 20%. You receive the following data from the three…

As a recent hire of B-Well, your job is to evaluate whether the company should open a traditional grocery store in Astoria or start online shopping option instead. Before deciding which project to undertake, the Board of Directors has already agreed that they will hire a consultant to verify their decision. The consultant is charging $16, 580 total. They have also agreed that they will hire an NYC marketing agency to promote B-Well's reputation. They are not sure what the charge will be for the marketing services. For now, they just have to decide which project they will undertake. Brick & Mortar Store. B-Well Health Mart has to rent and renovate a space in Astoria. The estimates for the up-front renovation costs range from $2,250,000 to $2,650,000 to be depreciated over the life of the project using straight-line with a zero salvage value. There is a foreclosed warehouse in the area that their lenders are offering at a large discount since the lenders are losing money on it. The…

HomeGrown Company is a chain of grocery stores that are similar to indoor farmer's markets, providing fresh, local produce, meats, and dairy products to consumers in urban areas. HomeGrown is considering opening several stores in a new city, and has proposals from three contractors (Alpha, Beta, and Gamma companies) who would like to provide buildings for the new stores. The amount of expected revenue from the stores will depend on the design of the contractor. For example, if HomeGrown decides on a more open floor plan, with less shelf space for products, revenue would be lower overall. However, if HomeGrown decides on a very crowded floor plan, it may lose customers who appreciate a more open feel. As the project manager for HomeGrown, you are responsible for deciding which if any of the proposals to accept. HomeGrown's minimum acceptable rate of return is 20%. You receive the following data from the three contractors: Proposal Type of Floor Plan Investment if Selected…

HomeGrown Company is a chain of grocery stores that are similar to indoor farmer's markets, providing fresh, local produce, meats, and dairy products to consumers in urban areas. HomeGrown is considering opening several stores in a new city, and has proposals from three contractors (Alpha, Beta, and Gamma companies) who would like to provide buildings for the new stores. The amount of expected revenue from the stores will depend on the design of the contractor. For example, if HomeGrown decides on a more open floor plan, with less shelf space for products, revenue would be lower overall. However, if HomeGrown decides on a very crowded floor plan, it may lose customers who appreciate a more open feel. As the project manager for HomeGrown, you are responsible for deciding which if any of the proposals to accept. HomeGrown's minimum acceptable rate of return is 20%. You receive the following data from the three contractors: Proposal Type of Floor Plan Initial Cost if Selected…

HomeGrown Company is a chain of grocery stores that are similar to indoor farmer's markets, providing fresh, local produce, meats, and dairy products to consumers in urban areas. HomeGrown is considering opening several stores in a new city, and has proposals from three contractors (Alpha, Beta, and Gamma companies) who would like to provide buildings for the new stores. The amount of expected revenue from the stores will depend on the design of the contractor. For example, if HomeGrown decides on a more open floor plan, with less shelf space for products, revenue would be lower overall. However, if HomeGrown decides on a very crowded floor plan, it may lose customers who appreciate a more open feel. As the project manager for HomeGrown, you are responsible for deciding which if any of the proposals to accept. HomeGrown's minimum acceptable rate of return is 20%. You receive the following data from the three contractors: Proposal Type of Floor Plan Initial Cost if Selected…

HomeGrown Company is a chain of grocery stores that are similar to indoor farmer's markets, providing fresh, local produce, meats, and dairy products to consumers in urban areas. HomeGrown is considering opening several stores in a new city, and has proposals from three contractors (Alpha, Beta, and Gamma companies) who would like to provide buildings for the new stores. The amount of expected revenue from the stores will depend on the design of the contractor. For example, if HomeGrown decides on a more open floor plan, with less shelf space for products, revenue would be lower overall. However, if HomeGrown decides on a very crowded floor plan, it may lose customers who appreciate a more open feel. As the project manager for HomeGrown, you are responsible for deciding which if any of the proposals to accept. HomeGrown's minimum acceptable rate of return is 20%. You receive the following data from the three contractors: Proposal Type of Floor Plan Initial Cost if Selected…

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4. What is a Break-even Point and why do managers calculate it? 5. Branton Electric is considering the purchase of an entire cargo container filled with upgraded utility meters for $20,000. Branton can charge $50 for the installation of each upgraded meter, while the actual cost of the installation would be only $15. How many utility meter upgrades are necessary for Branton Electric to break even on this purchase? (Quick Start #16) 6. What are the advantages and disadvantages of using a conservative strategy of Capacity versus an Aggressive strategy?

Simple Rate of Return; Payback Period Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Inc., to dispense frozen yogurt products under The Yogurt Place name. Mr. Swanson has assembled the following information relating to the franchise: a. A suitable location in a large shopping mall can be rented for $3,500 per month. b. Remodeling and necessary equipment would cost $270,000. The equipment would have a 15-year life and an $18,000 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation. c. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $300,000 per year. Ingredients would cost 20% of sales. d. Operating costs would include $70,000 per year for salaries, $3,500 per year for insurance, and $27,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., of 12.5% of sales. Required: 1. Prepare a contribution…

(Analysis of Alternatives) The Black Knights Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Black Knights has decided to locate a new factory in the Panama City area. Black Knights will either buy or lease a site depending upon which is more advantageous. The site location committee has narrowed down the available sites to the following three very similar buildings that will meet their needs. • Building A: Purchase for a cash price of $600,000, useful life 25 years. • Building B: Lease for 25 years with annual lease payments of $69,000 being made at the beginning of the year. • Building C: Purchase for $650,000 cash. This building is larger than needed; however, the excess space can be sublet for 25 years at a net annual rental of $7,000. Rental payments will be received at the end of each year. The Black Knights Inc. has no aversion to being a landlord. Instructions In which…

2. You are thinking about starting a restaurant franchise in Irvine, California. You are considering two choices – either a P.F. Chang’s or a Dairy Queen. Unfortunately, you only have an opportunity to build one or the other. The details are the following:    P.F. Chang’s: The franchise fee and cost of the building are $1,000,000. After careful calculation, you believe the restaurant will generate $150,000 a year in positive cash flow for the next 20 years at which point the franchise rights expire and the building is worthless (ie. There’s no extra money at the end). Discount rate is 10%.    Dairy Queen: The franchise fee and cost of the building are $500,000. After careful calculation, you believe the restaurant will generate $80,000 a year in positive cash flow for the next 20 years at which point the franchise rights expire and the building is worthless (ie. There’s no extra money at the end). Discount rate is 10%.   a) What are the two projects’ IRRs and which franchise would you…

The Monty Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Monty has decided to locate a new factory in the Panama City area. Monty will either buy or lease a site depending upon which is more advantageous. The site location committee has narrowed down the available sites to the following three very similar buildings that will meet their needs.Building A: Purchase for a cash price of $617,900, useful life 27 years.Building B: Lease for 27 years with annual lease payments of $70,330 being made at the beginning of the year.Building C: Purchase for $655,700 cash. This building is larger than needed; however, the excess space can be sublet for 27 years at a net annual rental of $6,700. Rental payments will be received at the end of each year. The Monty Inc. has no aversion to being a landlord.In which building would you recommend that The Monty Inc. locate, assuming a 12% cost of funds?…

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The owner of a small printing company is considering the purchase of additional printing equipment to expand her business. If the owner expands the business and sales are high, projected profits (minus the cost of the equipment) should be $90,000; if sales are low, projected profits should be $40,000. If the equipment is not purchased, projected profits should be $70,000 if sales are high and $50,000 if sales are low.   Are there options other than the purchase of additional equipment that should be considered in making the decision to expand the business? If the owner is optimistic about the company's future sales, should the company expand by purchasing the equipment? Is the owner's optimism or pessimism about sales the only factor that may impact the company's profits? The equipment to be purchased is known in the industry to have a useful life of five years. How might this impact the printing company?

Brubaker Inc., a manufacturer of high-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Brubaker has decided to locate a new factory in the Panama City area. Brubaker will either buy or lease a site depending upon which is more advantageous. The site location committee has narrowed down the available sites to the following three buildings.   Building A: Purchase for a cash price of $610,000, useful life 25 years. Building B: Lease for 25 years with annual lease payments of $70,000 being made at the beginning of the year. Building C: Purchase for $650,000 cash. This building is larger than needed; however, the excess space can be sublet for 25 years at a net annual rental of $6,000. Rental payments will be received at the end of each year. The Brubaker Inc. has no aversion to being a landlord. In which building would you recommend that Brubaker Inc. locate, assuming a 12% cost of funds? (Show work please)

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The Monty Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Monty has decided to locate a new factory in the Panama City area. Montyy depending upon which is more advantageous. The site location committee has narrowed down the three very similar buildings that will meet their needs. Building A: Purchase for a cash price of $613,700, useful life 27 years. Building B: Lease for 27 years with annual lease payments of $70,100 being made at the beginning of the year. Building C: Purchase for $659,100 cash. This building is larger than needed; however, the excess space can be sublet for 27 years at a net annual rental of $6,470. Rental payments will be received at the end of each year. The Monty Inc. has no aversion to being a landlord. Click here to view factor tables. In which building would you recommend that The Monty Inc. locate, assuming a 12% cost of funds? (Round factor values to 5…

The Ayayal Inc, a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Ayayai has decided to locate a new factory in the Panama City area. Ayayai will either buy or lease a site depending upon which is more advantageous. The site location committee has narrowed down the available sites to the following three very similar buildings that will meet their needs. Building A: Purchase for a cash price of $610,000, useful life 27 years Building B: Lease for 27 years with annual lease payments of $71.570 being made at the beginning of the year. Building C: Purchase for $650.800 cash. This building is larger than needed: however, the excess space can be sublet for 27 years at a net annual rental of $6,890. Rental payments will be received at the end of each year. The Ayayal Inc has no aversion to being a landlord. Click here to view factor tables In which building would you recommend that The Ayayal Inc…

The Novak Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Novak has decided to locate a new factory in the Panama City area. Novak will either buy or lease a site depending upon which is more advantageous. The site location committee has narrowed down the available sites to the following three very similar buildings that will meet their needs.Building A: Purchase for a cash price of $618,100, useful life 26 years.Building B: Lease for 26 years with annual lease payments of $70,340 being made at the beginning of the year.Building C: Purchase for $653,200 cash. This building is larger than needed; however, the excess space can be sublet for 26 years at a net annual rental of $6,540. Rental payments will be received at the end of each year. The Novak Inc. has no aversion to being a landlord.

The Crane Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Crane has decided to locate a new factory in the Panama City area. Crane will either buy or lease a site depending upon which is more advantageous. The site location committee has narrowed down the available sites to the following three very similar buildings that will meet their needs. Building A: Purchase for a cash price of $610,000, useful life 27 years. Building B: Lease for 27 years with annual lease payments of $70,500 being made at the beginning of the year. Building C: Purchase for $656,700 cash. This building is larger than needed; however, the excess space can be sublet for 27 years at a net annual rental of $6,570. Rental payments will be received at the end of each year. The Crane Inc. has no aversion to being a landlord. Click here to view factor tables. In which building would you recommend that The Crane Inc.…