Papa Geo Budgeting Project

1986 words 8 pages
Brain Enterprises
Budget Proposal
For
Papa Geo’s Restaurant

BUSN-278
SUMB11 Sec B
Professor Marie Main
DeVry University

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Table of Contents

Section | Title | Subsection | Title | Page Number | 1.0 | Executive summary | | | 3 | 2.0 | Sales Forecast | | | 3 | | | 2.1 | Sales Forecast | 3 | | | 2.2 | Methods and Assumptions | 4 | 3.0 | Capital Expenditure Budget | | | 4 | 4.0 | Investment Analysis | | | 6 | | | 4.1 | Cash flows | 7 | | | 4.2 | NPV Analysis | 8 | | | 4.3 | Rate of Return Calculations | 8 | | | 4.4 | Payback Period Calculations | 9 | 5.0 | Pro Forma Financial Statements | | | 9 | | | 5.1 | Pro Forma Income Statement
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The major items which are the most costly are the ovens, fridges, ice cream machine and gaming devices. The ovens and fridges are necessary items but if cutting back on costs is essential it would be wise to decrease the number of games wanting to be bought since they make the biggest impact on the budget. I would not cut out the ice cream machine because it is a highly favorable desert among customers, especially children. It would be a wise investment to keep as it would satisfy customers. Most items were doubled so that incase one object broke there was a spare that is usable and within reach. The Managers’ are going to be kept at a salaried rate with possible increases yearly upon A formal yearly review. The Manager’s salary will be at $35,000 and the Assistant Manager’s salary will be $25,000. The hourly employees are the two cooks, earning $12/hr, cashier, earning $8/hr, and the table busers, earning $10/hr to clean up after the customers and the restaurant itself. * 4.0 Investment Analysis

* The NPV was done at the end of the year basis where everything was totaled for the entire year. The loan taken from the bank was rounded up to the nearest hundred and then another $10,000 was put aside for materials that might have been left out of the assessment. The NPV shows a high return from the start and the owner of Papa Geo’s has no need to use personal funds. The discount rate was set at a default 10%

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