1- Estimate the annual cash flows for the brewpub project. Use the "best case scenario". To do this, calculate the annual revenues and annual expenses for the 10 year project,any changes in the net working capital, and any changes to capital expenditures. Describe all assumptions and calculations you used to arrive at the final cash flows.

2- Calculate the NPV and IRR of the project given the information presented using the "best case scenario".

Project Details are:-

The space cost $2500 per month. Intial construction cost could be $250,000. In a barrel of beer, there are 31 gallons of beer. There are 8 pints in a gallon. Samantha estimates that each seat in restaurant will require about 7 barresl of beer (best case scenario) per year. They own a 80 seat restaurant . Cost of high quality brewpub system is $300,000. Ingredients costs $4,000 to make 10 barrels of beer. These costs are expected to increase 5 percent per year. Maintenance cost of about $15,000 per year (after the first year of operations). Three additional servers per day at a cost to the restaurant of $80 per day per server , and servers typically work 320 days out of the year. An additional person to run the brewery machinery on a full time basis at a starting salary of $40,000 per year. The business increase salary at 3 percent per year. Insurance cost 3000 per year. Utilities costs about $24000 per year. An fees to obtain license is $65,000 and then $700 per year as a license renewal fee. The restaurant paid a media fees of $20,000 and then expect the advertisement fees of $80,000 per year.

The sale price is set on $5 per pint during the first year of operation. They hope to increase this price by 3 percent each year thereafter.