ECON 134A CASE STUDY 2 - Upland Restaurant CaseProcessing

Java Python ECON 134A

CASE STUDY 2 - Upland Restaurant Case

Valuing Mutually Exclusive Capital Projects

Instructions

This case study will ask you to evaluate mutually exclusive investment opportunities by putting yourself in the shoes of two recent graduates turned restaurant owners and investors. After reading the background scenario carefully, you will have to answer a series of preparatory questions and write an executive summary. The questions are meant to guide you to prepare the executive summary. You are free (and encouraged) to work on additional analyses to make your executive summary stronger.

You will have to upload a single pdf document containing 1) the one-page executive summary, 2) answers to the  preparatory  questions,  and  3)  all  the  tables  and  appendices  backing  up  your  analysis,  including  any additional work you think is helpful.

Note that points will be awarded for presentation. This includes the ease with which one can understand your work, whether your final  document  is  nicely  formatted,  whether  tables  and  exhibits  are  clear  and  well- documented, etc. You may want to think of your report as something you would feel comfortable handing in to your boss if you were a financial analyst.

You may work in groups of up to four students, in which case you only needto submit one report. Please make sure to include the names and student IDs of all students in the file. Working in groups is highly recommended.

Background

After graduating from  UCI  2 years ago, you and three friends decided to start  Upland  Restaurant.   After searching for several months for a location in Irvine, you decided togo a different route and buy 5 acres of land including an old restaurant and a small building, formerly used for offices, at the edge of town. After renovating the old restaurant, you were able to open and grow sales over the past 2 years.  However, lacking the initial capital, you never did anything with the other smaller building.   Now that you have saved up some cash, you and your friends feel like you can generate some extra income from the existing building.  To that end, you and your team  have  paid $20,000 to a consulting firm for a forecast of the future  revenues and costs associated with the different options you are considering. The exhibits given below are the outcome