HM 435 Summer 2016 – Project Two Due June 2nd 2016 in Class This project continues the analysis of the company that you selected in project one. So please feel free to use any of your project 1 analysis as basis of this report. The overall goal of this project is as follows: Recommend an investment and show its financial viability for one unit (hotel/restaurant) of the company of your choice. Please answer the questions enclosed in the report template to complete your report regarding the financial viability of the investment project. Deliverables: 1. Completed Report Template – 1 page only 2. Financial analysis appendix – 1 page only Please Staple your report. Name; Company Name; Investment Project: INTRODUCTION [Think of an investment project in physical and or intangible assets that could help improve financial performance of your company from project 1, or any other project for another company if you want to change companies.] [50 words] INVESTMENT PROJECT [Describe the investment project, and identify one store or outlet of the company where you would choose to implement this project.] [50 words] FEASIBILITY ASSESSMENT Financial Analysis An income statement for years 2016, 2017, and 2018 should accompany this section. You should be able to make this income statement by answering questions in subsequent subsections. This income statement should only be for your investment project implemented in one outlet or store of your company. Project Revenues [How much revenue will you generate from this project alone for 2016? How much will this revenue grow in year 2017, and then in 2018? How much of this growth in revenues would be? Does this include inflation?] [50 words] Operating Costs [What are the most important costs associated with this project: cost of goods sold, labor cost, administrative expenses, depreciation cost, maintenance cost, others? You may use previous income statements of this company to estimate these costs as a percentage of revenues. Depreciation cost could be estimated by using straight-line depreciation method for all the fixed assets invested in this project – use estimated life of the asset in years, divide the total cost of the asset by this life in years, use this amount each year to depreciate the asset.] [50 words] Project Net Cash Flows Based on project revenues and costs, calculate the net income from this project for the three years. You may use a corporate tax rate of 40%. Then calculate the net cash flows for each of the three years as follows: net income plus any depreciation. If you don’t have any depreciation then simply use the net income as your net cash flows. Project Costs [Calculate total project cost: total cost of fixed assets. If your project does not involve expenditures in fixed assets then estimate any other one time costs.] 50 words] Capital Budgeting Analysis [The cost of capital or financing for this project is 9%. Use this 9% to calculate the present value of future cash flows occurring in 2016, 2017, and 2018. Once you have the present value of your future cash flows, add them up. This is the total of the present value of your future cash flows. Now subtract the net investment (Project Costs) from this total present value of future cash flows. What is your net present value of the investment project?] [50 words] PROJECT INVESTMENT DECISION [Based on the results of your net present value analysis, what would be your recommendation of whether this investment project should be implemented or not? Explain.] [50 words] Attachment: Include an attachment that has the following (one page only): 1. Income statement for three years with net income and net cash flows. 2. Present value of all cash flows and total investment cost. 3. Net Present Value