Location: Idaho Falls, ID
The Cellar is a restaurant serving international cuisine currently operating in Idaho Falls. It is available for sale at $295,000. Based on current market rates and data available that can help investors and potential buyers make decisions, a reliable forecast of the income statement, balance sheet, and statement of free cash flows has been prepared by a group of students.
In the forecast, major revenues are derived from lunch and dinner provided by the restaurant. Much of the rates charged by the restaurant are comparable to competitors in the Idaho Falls area. One of the most significant expenses would be the initial cost of mortgage, which is estimated to be $1 million. Based on the forecast, the internal rate of return would be close to the weighted average cost of capital, which is 10.43%.
Based on the forecast, we recommend this restaurant to be profitable for potential investors, since internal rate of return is close to the cost of the company’s capital.