The Lease Option - Planet Karaoke

Projected Life 4 years Patronage Factor

Renovation cost 770000 0
Tax rate 30% 0.25
COC 10.75 0.5
Repair & M 10000 0.75
Patronage Factor 0.5 1

Year 0 1 2 3 4
Net Room Revenue 13200000 13464000 14137000 14844000
Reduction in revenue 1650000 1683000 1767125 1855500

Year 0 1 2 3 4
Rental Income 2040000 2040000 2142000 2142000
Less Depreciation 192500 192500 192500 192500
Less R & m 10000 10000 10000 10000
Reduction in Room Rev 1650000 1683000 1767125 1855500
EBIT 187500 154500 172375 84000
Less Taxes 56250 46350 51712.5 25200
EBIT (1-T) 131250 108150 120662.5 58800
Add Dep 192500 192500 192500 192500
Op CF 323750 300650 313162.5 251300
Less Capex 770000 0 0 0 0
FCF -770000 323750 300650 313162.5 251300
dcf
($292,325.06) ($271,467.27) ($282,765.24) ($226,907.45)

ROI 297215.625 38.5994318182

NPV $148,999.54
IRR 21%
PI $1.39
EA $47,679.85 3.125
Decrease in room revenue
0
6.25%
12.50%
18.75%
25%

($1,073,465.01)
 Build Option-Beach Karaoke

Projected Life 6 years Patronage Factor

Renovation 800000 0
Equipment 900000 0.25
Tax rate 30% 0.5
COC 10.75 0.75
Repair & M 10000 1
Patronage Factor 0.5
Sales Growth Rate 5%
F&B 25% of sales
Salary 16% of sales
Other Opex 22% of sales
Annual capex equals depreciation

Year 0 1 2 3 4
Net Room Revenue 13200000 13464000 14137000 14844000
Reduction in revenue 1650000 1683000 1767125 1855500

Year 0 1 2 3 4
Sales 4672000 4905600 5150880 5408424
Less F &B 1168000 1226400 1287720 1352106
Less Opex 1027840 1079232 1133193.6 1189853.28
Less Dep 283333 283333 283333 283333
Less R& M 10000 10000 10000 10000
Less Reduction in Revenue 1650000 1683000 1767125 1855500
EBIT 532827 623635 669508.4 717631.72
Less Taxes 159848.1 187090.5 200852.52 215289.516
ebit(1-t) 372978.9 436544.5 468655.88 502342.204
Add Dep 283333 283333 283333 283333
OCF 656311.9 719877.5 751988.88 785675.204
Less Capex -1700000 283333 283333 283333 283333
NCF -1700000 372978.9 436544.5 468655.88 502342.204
($336,775.53) ($394,171.11) ($423,165.58) ($453,582.13)

ROI 502148.0834767 30%

NPV $336,834.58
IRR 17%
BCR $1.60
EA 79255.19621314 $4.25
Decrease in room revenue
0
6.25%
12.50%
18.75%
25%

5 6
15140000 15443000
1892500 1930375

5 6
5678845.2 5962787.46
1419711.3 1490696.865
1249345.944 1311813.2412
283333 283333
10000 10000
1892500 1930375
823954.956 936569.353800001
247186.4868 280970.80614
576768.4692 655598.54766
283333 283333
860101.4692 938931.54766
283333 283333
576768.4692 655598.54766
($520,784.17) ($591,962.57) ($2,720,441.08)