Capital Budgeting - Caroline Herring: Capital Budgeting:...

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Caroline Herring: “Capital Budgeting: Franchise Fast Food Restaurants” Caroline Herring BUS 515- Financial Management Dr. Gordon Smith September 18, 2011 Capital Budgeting: Franchise Fast Food Restaurants In this business case, I will attempt to assess what options are available to me after inheriting $1 million from my grandfather who recently passed. If profitable, I would like to purchase at least one, possibly two, fast food franchises in the area. I have narrowed my selection down to the following candidates: 1) Franchise L, Lisa's Soups, Salads, & Stuff and 2) Franchise S, Sam's Fabulous Fried Chicken. One of the franchises are open during breakfast and lunch and the other is open during dinner only, so theoretically, I would be able to have both if profitable. The following is a table of expected net cash flows, under the assumption that I sell the franchise at the end year 3. Expected Net Cash Flows (In thousands of Dollars) Year Franchise L Franchise S 0 -$100 -$100 1 10 70 2 60 50 3 80 20
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Capital Budgeting - Caroline Herring: Capital Budgeting:...

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