*There are more files that needed to be attached*Questions1. Would you invest in this franchise? Modify the financial projection toreflect the expenses left off. Make assumptions where necessary.2....

Case Study 9.1: Franchising the neighbourhood restaurant
1. Would you invest in this franchise? Modify the financial projection to reflect the expenses left off. Make assumptions where necessary.

    Proforma Income Statement at various Volume Level
    Sales
    1100000
    %
    1300000
    %
    1500000
    %
    Product Costs
     
     
     
     
     
     
    Food
    254100
    23.1%
    300300
    23.1%
    346500
    23.1%
    Alcohol
    85800
    7.8%
    101400
    7.8%
    117000
    7.8%
    Total
    339900
    30.9%
    401700
    30.9%
    463500
    30.9%
    Gross Margin
    760100
    69.1%
    898300
    69.1%
    1036500
    69.1%
    Labour Costs
     
     
     
     
     
     
    Wages
    220000
    20.0%
    234000
    18.0%
    240000
    16.0%
    Management
    33000
    3.0%
    39000
    3.0%
    45000
    3.0%
    Benefits
    33000
    3.0%
    39000
    3.0%
    45000
    3.0%
    Total
    286000
    26.0%
    312000
    24.0%
    330000
    22.0%
    Operating Expenses
     
     
     
     
     
     
    General
    71500
    6.5%
    84500
    6.5%
    97500
    6.5%
    Operating
    71500
    6.5%
    78000
    6.0%
    82000
    5.5%
    Rent
    85500
    7.8%
    85500
    6.6%
    85500
    5.7%
    Royalty
    44000
    4.0%
    52000
    4.0%
    60000
    4.0%
    Advertising
    77000
    7.0%
    91000
    7.0%
    105000
    7.0%
    Depreciation expense
    7500
    0.7%
    9000
    0.7%
    10000
    0.7%
    Amortization expense
    12000
    1.1%
    14000
    1.1%
    16000
    1.1%
    Interest and debt repayment
    36464
    3.3%
    40113
    3.1%
    41938
    2.8%
    Other non-operating business expenses: Restructuring Expenses
    24000
    2.2%
    28600
    2.2%
    33000
    2.2%
    Total Operating Expenses before Tax
    429464
    39.0%
    482713
    37.1%
    530938
    35.4%
    Earnings before Tax (EBT)
    44636
    4.1%
    103587
    8.0%
    175562
    11.7%
    Corporate Income Tax @ 10.25%
    4575
    0.4%
    10618
    0.8%
    17995
    1.2%
    Net Profit
    40060
    3.6%
    92969
    7.2%
    157567
    10.5%
    Sales Level
    1100000
    1300000
    1500000
    Depreciation on Restaurant equipments
     
     
     
    Years (MACRS)
    20
    20
    20
    Equipments
    150000
    180000
    200000
    Depreciation...