FOOD AND BEVERAGE SALES FOR JIMMY'S GREEK RESTAURANT
Question
Use the table "Food and Beverage Sales for Jimmy's Greek Restaurant" to answer the questions below.
Food and Beverage Sales for Jimmy's Greek Restaurant
($000s)
Month
First Year
Second Year
January
242
263
February
235
238
March
232
247
April
278
193
May
284
193
June
240
149
July
145
157
August
152
161
September
110
122
October
130
130
November
152
167
December
236
231
Part (a): Calculate the regression line and forecast sales for January of Year 3.
Part (b): Calculate the seasonal forecast of sales for January of Year 3.
Part (c): Which forecast do you think is most accurate and why?
(TCO 6) Mimi Company is considering a capital investment of $250,000 in new equipment. The equipment is expected to have a 5-year useful life with no salvage value. Depreciation is computed by the straight-line method. During the life of the investment, annual net income and cash inflows are expected to be $25,000 and $75,000, respectively. Mimi's minimum required rate of return is 10%.
Part (a): Calculate the payback period.
Part (b): Calculate the net present value.
Part (c): Calculate the accounting rate of return.