See the PDF file.
This project continues the analysis of the company that you selected in project one. So please feel free to use any of your project 1 analysis as basis of this report.
The overall goal of this project is as follows: Recommend an investment and show its financial viability for one unit (hotel/restaurant) of the company of your choice.
Please answer the questions enclosed in the report template to complete your report regarding the financial viability of the investment project.
Deliverables:
1. Completed Report Template
2. Financial analysis appendix
Please Staple your report.
Name: Company Name: Investment Project:
1. INTRODUCTION
[Identify an investment project in physical and or intangible assets that could help sustain financial performance of your company in this time of crisis.]
2. INVESTMENT PROJECT
[Describe the investment project identified in the Introduction, particularly the project risks – what is the project? Identify one store or outlet of the company where you would choose to implement this project. Why would you choose this location?]
3. FEASIBILITY ASSESSMENT
Financial Analysis
[Explain the concept of present value?]
[An income statement for years 2023, 2024, and 2025should accompany this section. You should be able to make this income statement by answering questions in subsequent subsections. This income statement should only be for your investment project implemented in one outlet or store of your company.]
a. Project Revenues
[How much revenue will you generate from this project alone for 2023? How much will this revenue grow in year 2024, and then in 2025? How much of this growth in revenues would be real, that is, non-inflationary?]
b. Operating and Project Costs
[What are the most important costs associated with this project: cost of goods sold, labor cost, administrative expenses, depreciation cost, maintenance cost, others? You may use previous income statements of this or a comparable company to estimate these costs as a percentage of revenues. Depreciation cost could be estimated by using straight-line depreciation method for all the fixed assets invested in this project – use estimated life of the asset in years, divide the total cost of the asset by this life in years, use this amount each year to depreciate the asset.]
[Calculate total project cost: total cost of fixed assets. If your project does not involve expenditures in fixed assets then estimate any other one-time costs.]
c. Project Net Cash Flows
[Based on project revenues and costs, calculate the net income from this project for the three years. You may use a corporate tax rate of 40%. However, also consider you may not pay 2023 taxes due to Federal tax assistance. Then calculate the net cash flows for each of the three years as follows: net income plus any depreciation. If you don’t have any depreciation then simply use the net income as your net cash flows.]
d. Capital Budgeting Analysis
[What are the two important items you need to complete a capital budgeting analysis? {Hint: What is the total investment cost of your project? What are the net cash flows of your project for three years?} Which of these amounts is a present value? Which of these amounts is a future value? Can you add all the future values as is? The cost of capital or financing for this project is 9%. How can you use this 9% to calculate the present value of future cash flows occurring in 2023, 2024 and 2025?]
[Once you have the present value of your future cash flows, add them up. This is the total of the present value of your future cash flows. Now subtract the net investment from this total present value of future cash flows. What is your net present value of the investment project?]
4. PROJECT INVESTMENT DECISION
[Based on the results of your net present value analysis, what would be your recommendation of whether this investment project should be implemented or not? Explain.]
5. CONCLUSION
[Provide a brief summary of your project, and make recommendations for the future.] [50 words]
Attachment: Include an attachment that has the following (one page only):
1. Income statement for three years with net income and net cash flows.
2. Present value of all cash flows and total investment cost.
3. Net Present Value
