BUSN278 DeVry University Capital Expenditure Budget Presentation

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Business Finance

DeVry University

Description

As the consultant, you’ll create a 5 year budget that supports the entrepreneur’s vision and strategy and needs for equipment labor and other startup costs.You can choose from one of three types of new business startups -- a landscaping company, a restaurant, or an electronics store that sells portable computing devices.Each business has its own Business Profile detailed in the below sections.The purpose of the Business Profile is to guide you in understanding the scope of the business, the entrepreneur’s startup costs, and financial assumptions. The project requires you to create a written budget proposal, a supporting Excel Workbook showing your calculations, as well as a PowerPoint presentation summarizing the key elements of the budget proposal, which you assume will be presented to a management team.At least one authoritative, outside reference is required (anonymous authors are not acceptable). These should be listed on the last page (titled Works Cited).

Appropriate citations are required.

Essentially, all sales are made by credit card. All credit card sales are a paid to the

restaurant daily by the credit card company

2.5% of sales is paid to a credit card company in fees

Food suppliers give 30 days of trade credit

Inventories are expected to be approximately 10% of the following month’s sales

The average meal costs $4.00 in materials and labor.

The average family spends $4.00 on vending machine tokens

Equipment is depreciated on a straight-line basis over 5 years

Managers have health benefits, other workers do not.

The company will operate from 10:00 am to 9 pm,7 days a week.

The entrepreneur will manage the store and draw a salary.

Every shift has one person on the cash register, one keeping the food bars

stocked with food, and one on busing and table cleaning, a manager and

assistant manager.

*If you believe any other assumptions are necessary, then please state them in your

budget proposal

Costs you should estimate through research, experience or other methods

Soda Fountain Bar

2 Pizza Ovens

Salad and Pizza/Dessert Bar

Approximately 100 square foot commercial refrigerator

2 cash registers

6 Video Game vending machines

Average of 6 staff members at any given time

Management Office with desk, lower-priced laptop computer

Staff lunchroom equipment such as microwave, sink, cupboards and refrigerator

20 four-seater tables with chairs

Busing cart for transporting dirty dishes from the dining area to the dish washing

area

140 sets of dishes, cutlery and drinking cups

Commercial Dishwasher

Miscellaneous cooking and food handling equipment like trays, lifters, spoons,

pots; etc.

The cost of an average of 7 employees on the payroll.

All operating costs, such as advertising, rent for a 3500 square foot facility with

male and female washrooms, already installed, utilities, maintenance, and

annual depreciation.

*if you have questions about startup requirements, or think other startup costs are

necessary for the business are missing, then make an assumption and state it in the

relevant section of the report.

Given Financial Assumptions*

The owner will be granted a loan for the initial startup, repayable over 10 years

at current interest rates for small business loans

The owner will use personal funds to operate the business until it generates

enough cash flow to fund itself.

Section 1 Business Description/Objectives Summary (Executive Summary)

Section 2 Sales Forecast

Section 3 Capital Expenditure Budget

Section 4 Investment Analysis

Section 5 Pro Forma Income Statement

Section 6 Pro Forma Balance Sheet

Section 7 Pro Forma Cash Budget

Section 8 Final Budget Proposal Template and Budget Proposal Workbook

Using a presentation tool such as PowerPoint (with narration), create a presentation directed to the management team for your start-up business that will outline your proposal, summarize the key points and defend your budget.

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Explanation & Answer

Attached.

Sales from average standard meal
Vending machine tokens
Total sales

Papa Geo Restaurant Sales Forecast
Year 1
Year 2
Year 3
$ 2,555,000.00 $ 2,708,300.00 $ 2,870,798.00
$ 365,000.00 $ 386,900.00 $ 410,114.00
$ 2,920,000.00 $ 3,095,200.00 $ 3,280,912.00

Year 4
Year 5
$ 3,043,045.88 $ 3,225,628.63
$ 434,720.84 $ 460,804.09
$ 3,477,766.72 $ 3,686,432.72

Papa Geo Restaurant Capital Expenditure Budget
Item
1
2
3
4
5
6
7
8
9
10
11
12
13
14

Soda Fountain Bar
2 Pizza Ovens
Salad and Pizza/Dessert Bar
Approximately 100 square foot commercial refrigerator
2 cash registers
6 Video Game vending machines
Busing cart
140 sets of dishes, cutlery and drinking cups
Commercial Dishwasher
Miscellaneous cooking and food handling equipment like trays, lifters, spoons, pots
20 Four-Seater Tables with chairs
Management Office with desk
lower-priced laptop computer
Staff lunchroom equipment such as microwave, sink, cupboards and refrigerator
Total Capital Expenditure Budget

Cost
$ 5,000.00
$ 20,000.00
$ 1,000.00
$ 15,000.00
$ 1,000.00
$ 30,000.00
$ 1,500.00
$ 14,000.00
$ 1,000.00
$ 5,000.00
$ 40,000.00
$ 3,000.00
$ 1,000.00
$ 25,000.00
$ 162,500.00

Papa Geo Pro Forma Income Statements

Sales from meals
Vending machine tokens

Year 1
Year 2
$ 5,110,000.00 $ 5,416,600.00
$
365,000.00 $
386,900.00

Total sales
Cost of sales

$ 5,475,000.00 $ 5,803,500.00
$ (2,920,000.00) $ (3,095,200.00)

Gross profit
Fees to credit companies

$ 2,555,000.00 $ 2,708,300.00
$ (136,875.00) $ (145,087.50)
$
(15,000.00) $
$
(1,000.00) $
(1,000.00)
$
(160.00) $
(160.00)
$
(24,000.00) $
(24,000.00)
$ (216,000.00) $ (216,000.00)
$ (120,000.00) $ (120,000.00)
$ (1,200,000.00) $ (1,200,000.00)
$
(5,000.00) $
(4,500.00)
$
(5,000.00) $
(6,000.00)
$
(5,000.00) $
(5,500.00)
$
(32,500.00) $
(32,500.00)
$
(9,000.00) $
(9,000.00)

Renovation of the facility expected to cost
Business Insurance
Filing fees & registration cost
Health and other benefits
Staff Salaries
Managers Salaries
Rent
Advertising
Utilities
Maintenance
Annual depreciation (20% per year SL)
Interest on loan (4.5%)
Total expenses other than tax
Income before tax
Tax (5.5%)
Net income/ (loss)
Retained earnings/loss

$ (1,769,535.00) $ (1,763,747.50)
$
785,465.00 $
944,552.50
$
(43,200.58) $
(51,950.39)
$
$

742,264.43 $
892,602.11
742,264.43 $ 1,634,866.54

me Statements
Year 3
Year 4
Year 5
$ 5,741,596.00 $ 6,086,091.76 $ 6,451,257.27
$
410,114.00 $
434,720.84 $
460,804.09
$ 6,151,710.00 $ 6,520,812.60 $ 6,912,061.36
$ (3,280,912.00) $ (3,477,766.72) $ (3,686,432.72)
$ 2,870,798.00 $ 3,043,045.88 $ 3,225,628.63
$ (153,792.75) $ (163,020.32) $ (172,801.53)
$
$
$
$
(1,000.00) $
(1,000.00) $
(1,000.00)
$
(160.00) $
(160.00) $
(160.00)
$
(24,000.00) $
(24,000.00) $
(24,000.00)
$ (216,000.00) $ (216,000.00) $ (216,000.00)
$ (120,000.00) $ (120,000.00) $ (120,000.00)
$ (1,200,000.00) $ (1,200,000.00) $ (1,200,000.00)
$
(4,050.00) $
(3,645.00) $
(3,280.50)
$
(7,200.00) $
(8,640.00) $
(10,368.00)
$
(6,050.00) $
(6,655.00) $
(7,320.50)
$
(32,500.00) $
(32,500.00) $
(32,500.00)
$
(9,000.00) $
(9,000.00) $
(9,000.00)
$ (1,773,752.75) $ (1,784,620.32) $ (1,796,430.53)
$ 1,097,045.25 $ 1,258,425.57 $ 1,429,198.10
$
(60,337.49) $
(69,213.41) $
(78,605.90)
$ 1,036,707.76 $ 1,189,212.16 $ 1,350,592.20
$ 2,671,574.30 $ 3,860,786.46 $ 5,211,378.66

Fixed Assets
Equipment

Year 1
Year 2
Year 3
$ 162,500.00 $ 162,500.00 $ 162,500.00

Accumulated depreciation

$ (32,500.00) $

(65,000.00) $

(97,500.00)

Net Equipment

$ 130,000.00 $

97,500.00 $

65,000.00

Current Assets
Inventory
Cash/Bank

$ 17,500.00 $
17,500.00 $
17,500.00
$ 794,764.43 $ 1,719,866.54 $ 2,789,074.30

Total current assets

$ 812,264.43 $ 1,737,366.54 $ 2,806,574.30

TOTAL ASSETS
Equity and Liabilities
Long term loan 4.5% loan
Retained earnings

$ 942,264.43 $ 1,834,866.54 $ 2,871,574.30
$ 200,000.00 $ 200,000.00 $ 200,000.00
$ 742,264.43 $ 1,634,866.54 $ 2,671,574.30

TOTAL EQUITY & LIABILITIES

$ 942,264.43 $ 1,834,866.54 $ 2,871,574.30

Year 4
Year 5
$ 162,500.00 $ 162,500.00
$ (130,000.00) $ (162,500.00)
$

32,500.00 $

-

$
17,500.00 $
17,500.00
$ 4,010,786.46 $ 5,393,878.66
$ 4,028,286.46 $ 5,411,378.66
$ 4,060,786.46 $ 5,411,378.66
$ 200,000.00 $ 200,000.00
$ 3,860,786.46 $ 5,211,378.66
$ 4,060,786.46 $ 5,411,378.66

YEAR 1
RECEIPTS
Cash at the beginning
Sales

YEAR 2

YEAR 3

$
200,000.00 $
779,764.43 $ 1,672,366.54
$ 5,475,000.00 $ 5,803,500.00 $ 6,151,710.00

Total receipts
PAYMENTS
Cost of sales
Income statement expenses
Taxes
Capital expenditure

$ 5,675,000.00 $ 6,583,264.43 $ 7,824,076.54

Total payments
Cash at the end of period

$ (4,895,235.58) $ (4,910,897.89) $ (5,115,002.24)
$
779,764.43 $ 1,672,366.54 $ 2,709,074.30

$ (2,920,000.00) $ (3,095,200.00) $ (3,280,912.00)
$ (1,769,535.00) $ (1,763,747.50) $ (1,773,752.75)
$
(43,200.58) $
(51,950.39) $
(60,337.49)
$ (162,500.00) $
$
-

YEAR 4

YEAR 5

$ 2,709,074.30 $ 3,898,286.46
$ 6,520,812.60 $ 6,912,061.36
$ 9,229,886.90 $ 10,810,347.81
$ (3,477,766.72) $ (3,686,432.72)
$ (1,784,620.32) $ (1,796,430.53)
$
(69,213.41) $
(78,605.90)
$
$
$ (5,331,600.44) $ (5,561,469.15)
$ 3,898,286.46 $ 5,248,878.66

Attached.

Running head: Restaurant Budget Proposal

Restaurant Budget Proposal
Papa Geo’s Restaurant
Name
Institution
Course

Restaurant Budget Proposal

2
Table of Contents

Section 1.......................................................................................................................................... 3
Business Description/Objectives Summary (Executive Summary) ................................................ 3
Introduction to Papa Geo’s Restaurant........................................................................................ 3
Papa Geo’s Vision ....................................................................................................................... 3
Market Focus/Analysis ................................................................................................................ 5
Product and services .................................................................................................................... 5
Basis of Competition ................................................................................................................... 6
Section 2.......................................................................................................................................... 3
Sales Forecast.................................................................................................................................. 3
Section 3.......................................................................................................................................... 4
Capital Expenditure Budget ............................................................................................................ 4
Section 4.......................................................................................................................................... 5
Investment Analysis .............................................................


Anonymous
Just what I needed…Fantastic!

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