Contenti Cupcakes

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Contenti Cupcakes is a concession/delivery stand for cupcakes and cakes.  It has the ability to follow main events and place itself in a favorable location to its market.  It is only one trailer run on by an average of three employees at a time. The main funding needed to start the business is for the trailer and oven.  We feel it is reasonable to start with initial funding of $30,000; $25,000 for a trailer and $5,000 for an oven.

We projected the first ten years of the company (the life of the trailer) using the prices listed on the start-up website.  To aid our projections, we assumed costs similar to those of other businesses in the same market along with number of sales (and growth of sales).  We estimated a WACC (Weighted Average Cost Capital) of 9.25% according to these assumptions. Our projected IRR (Internal Rate of Return) for the company stands at 9.8%

This company has potential to bring returns to investors through dividends.  The NPV of the dividends throughout the ten years amounts to $375,078. The company value, however, is less desirable with a NPV of -$78 over the ten years.  Dividends make or break the appeal of this investment.

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