Location: Cape Coral, FL
The attached spreadsheet model includes a forecasted analysis for the Family Fun Park which is located in Cape Coral, FL. The Family Park offers attractions for all ages. It features a 6,000 square foot arcade, paintball courses, children’s playground, miniature golf course, etc. The price of the property is listed at $2,950,000. We created a model which includes a pro forma income statement and balance sheet. The model also shows the mortgage rate amortization table. Based on the interest charged for this type of industry, we estimated how much they would have to pay each year for the building.
After analyzing the data, we estimated an average weighted cost of capital and internal rate of return of 7.59%. We believe that this price is high for this type of business. We included three options and estimated a rate of 33% when the option will be good, 49% when the option will be medium and 18% when we have a bad option. We expect this option to have a positive return, therefore we should continue with the option of building another park.