Suppose startup QuickFood proposes a new business model for delivering food in suburban areas. The business model includes fast revenue growth through entry into new cities. The company hopes to be worth $500 million in 5 years. A reasonable discount rate for the food delivery sector based on public comparables is 12%. How much is this company worth today (please round to closest unit)? -60 -284 -446 -313 -300
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Suppose startup QuickFood proposes a new business model for delivering food in suburban areas. The business model includes fast revenue growth through entry into new cities. The company hopes to be worth $500 million in 5 years. A reasonable discount rate for the food delivery sector based on public comparables is 12%. How much is this company worth today (please round to closest unit)?
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-446
-313
-300
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- A chain of take-away pizza stores is considering introducing a new line of gluten-free pizzas. Net revenue from the new line of pizzas is expected to total $500,000 per year, but 15% of this net revenue is forecast to consist of people switching from the regular pizzas to the gluten-free pizzas. How would you describe this situation in terms of the NPV analysis upon which the situation will be based. Question 1Answer a. There is a negative externality equal to $425,000 which should be included in the NPV analysis for the gluten-free pizza project. b. There is a positive externality equal to $425,000 which should be included in the NPV analysis for the gluten-free pizza project. c. There is a positive externality equal to $75,000 which should be included in the NPV analysis for the gluten-free pizza project. d. There is a negative externality equal to $75,000 which should be included in the NPV analysis for the gluten-free pizza project.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…Phlight Restaurant is considering a delivery service. The firm expects that sales from the new service will be $150,000 per year. Phlight currently offers a sit-down service with annual sales of $100,000. While many of the delivery sales will be to new customers, Phlight estimates that 60% of their current sit-down customers will switch and use the delivery service. The level of incremental sales associated with introducing the delivery service is closest to: Select one: a. $90,000 b. $150,000 c. $60,000 d. $120,000
- Answer the following question with complete solution and cash flow diagram. An engineer launches a project in the country's top techohub. This involves rental of a computer unit for online class students. He felt that because of the density of students in the area, 90% of his 30-units will be occupied per sem (5 months each) per year. He desires a rate of return of 20%. Other pertinent data are the following: Office investment Computer investment per unit Cost of computers after 10 yrs Office rental per month Computer rental per unit per month Annual maintenance budget per unit Business tax P 1,000,000 P 35,000 P 5,000 P 9,000 P 2,000 P 5,000 1% of Total Investment Insurance 0.5% of Total Investment Assess the project using (A) ROR, (B) Present Worth Method, and (C) Future Worth Method. (D) Estimate the payback period of this project.Answer the following question with complete solutions and cash flow diagram. An engineer launches a project in the country's top technohub. This involves rental of a computer unit for online class students. He felt that because of the density of students in the area, 90% of his 30-units will be occupied per sem (5 months each) per year. He desires a rate of return of 20%. Other pertinent data are the following: Office investment Computer investment per unit Cost of computers after 10 yrs |Office rental per month Computer rental per unit per month Annual maintenance budget per unit Business tax P 1,000,000 P 35,000 P 5,000 P 9,000 P 2,000 P 5,000 1% of Total Investment Insurance 0.5% of Total Investment Assess the project using (1) ROR, (2) Present Worth Method, and (3) Future Worth Method. (4) Estimate the payback period of this project.PLEASE SOLVE IN EXCEL :B&B has a new baby powder ready to market. If the firm goes directly to the market with the product, there is only a 60 percent chance of success. However, the firm can conduct customer segment research, which will take a year and cost $1.21 million. By going through research, the company will be able to better target potential customers and will increase the probability of success to 75 percent. If successful, the baby powder will bring a present value profit (at time of initial selling) of $19.1 million. If unsuccessful, the present value payoff is only $6.1 million. The appropriate discount rate is 14 percent. Calculate the NPV for the firm if it goes to market immediately and if it conducts customer segment research. (Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) Should the firm conduct customer segment research or go to the market immediately? multiple…
- conomics Please help me with this engineering economy question. thank you A. A student takes out $10,000 in loans. If she repays the loan over a 10 year period, calculate the annual payment. Assume 6% interest. B. Sam wants to borrow $20,000 for a car. The payment terms are calculated at 12% interest, compounded monthly, for 5 years. Calculate the monthly payment, choose the closest answer. C. A purchase of a new machine is being evaluated. If we assume 12% annual interest, what is the Equivalent Uniform Annual Cost? Choose the nearest answer. Initial Cost $30,000 Annual Maintenance $1,500 Salvage Value $5,000 Life 6 years D. A maintenance contract is $5,000 per year for 10 years. Assuming 9% annual interest, calculate the present value of this contract. Choose the closest answer.Finance John and John Plc. is a midsized electronics manufacturing company in the West of Scotland. You have recently joined as a finance manager at John and John. Last week, the marketing manager brought a new project to your attention. This project is about manufacturing robot vacuum cleaners ETX600 with an expected product life cycle of 4 years. In 2019, John and John Plc plans to launch these new vacuum cleaners if the project is financially feasible. Research and development costs incurred in the past three years amount to £150,000. Advertising is expected to cost £25,000 in year 1. Advertising costs will reduce by 10% every year thereafter. The company expects that sales in the first year will be £800,000, second and third year sales will be £650,000 and sales in the fourth year will be £600,000. Variable costs will be 50% of sales each year and the fixed production cost is expected to be £100,000 per year. The company estimates that if these new robot vacuum cleaners are…Calico Restaurants is planning to create a new online meals-to-order service and has estimated that creating it will have the following effects on its operations: a. Annual revenues will increase from $800,000/year to $1,300,000/year, for the next 3 years. b. While the restaurant earns an EBITDA margin (EBITDA as percent of sales) of 30% currently, it expects to earn an EBITDA margin of 40% on just its incremental online sales. c. The tax rate is 20% and the appropriate cost of capital for online restaurant businesses is 12%. Assuming that there will be an initial cost of $450,000 for creating the service, which will be depreciated straight line over 3 years to a salvage value of zero, estimate the NPV for the investment. a. 112,365 b. 9,865 C. -2,354 d. 6,348
- Assume you want to start your own small business. You like to open a bakery or nail salon. We assume that the set up cost is the same for both of them and you should invest 1000$. In terms of profit: if you open a bakery for the first year there is 35% chance that you earn 30% and 65% chance that you earn 15%. For the second year, there is 45% chance that you earn 50% and there is 55% chance that you earn 20%. If you open a nail salon, for the first year there is 25% chance that you 60% and 75% chance that you earn 40%. For the second year, there is 80% chance that you earn 30% and 20% chance that you earn 60%. Which business is a better investment that gives you the higher profit for your investment?Investing $2,000,000 in TQM's Channel Support Systems initiative will at a minimum increase demand for your products 3.0% in this and in all future rounds. (Refer to the TQM Initiative worksheet in the CompXM Decisions menu.) Looking at the Round 0 Inquirer for Andrews, last year's sales were $163,608,638. Assuming similar sales next year, the 3.0% increase in demand will provide $4,908,259 of additional revenue. With the overall contribution margin of 34.2%, after direct costs this revenue will add $1,678,625 to the bottom line. For simplicity, assume that the demand increase and margins will remain at last year's levels. How long will it take to achieve payback on the initial $2,000,000 TQM investment, rounded to the nearest month? A. 10 months B. TQM investment will not have a significant financial impact C. 14 months D. 5 monthsGidget has a new widget to bring to market. If the firm goes directly to market with the product, there is a 60% chance of success. However, the firm can conduct customer segment research, which will take a year and cost $5,000,000. By going through research, the company can better target potential customers and increase the probability of success to 75%. If successful, the widget will bring a present value profit (at the time of initial selling) of $90 million. If unsuccessful, the present value profit is only $15 million. The appropriate discount rate is 10%. Calculate the NPV for conducting customer segment research. (Enter whole numbers, e.g. 5 million should be 5,000,000)