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Papa John's International, Inc. has surpassed Little Caesars to became the Number 3 pizza chain, behind Pizza Hut and Domino's, with more than 2,300 restaurants scattered across the U.S. and five other countries. Most restaurants offer delivery and take-out only.

The following information was reported by Papa John's on the Form 10-k for the fiscal year ended December 26, 1999: For a company-owned restaurant average sales were $ 754,000; average cash flow were $ 154,000; and average operating income was $ 128,000. The expected cash investment per company-owned restaurant opening in the year 2000 is $ 244,000. Assume the value of the investment decreases to zero over a ten-year period.

For one company-owned Papa John's restaurant, compute the:

a. Payback period:
b. Accounting rate of return
c. Net present value assuming a 16% required rate of return: and
d. Internal rate of return
e. Does a Papa John's company-owned restaurant appear to be a good investment? Why or why not?

Quote:

Originally Posted by mizz mickey

Papa John's International, Inc., has surpassed Little Caesars to became the Number 3 pizza chain, behind Pizza Hut and Domino's, with more than 2,300 restaurants scattered across the U.S. and five other countries. Most restaurants offer delivery and take-out only.

The following information was reported by Papa John's on the Form 10-k for the fiscal year ended December 26, 1999: For a company-owned restaurant average sales were $ 754,000; average cash flow were $ 154,000; and average operating income was $ 128,000. The expected cash investment per company-owned restaurant opening in the year 2000 is $ 244,000. Assume the value of the investment decreases to zero over a ten-year period of time.

For one company-owned Papa John's restaurant, compute the:

a. Payback period:
b. Accounting rate of return
c. Net present value assuming a 16% required rate of return: and
d. Internal rate of return
e. Does a Papa John's company-owned restaurant appear to be a good investment? Why or why not?

Let us see your calculations otherwise what is your question?

I don't know how to calculate this question. And I think this question is about capital budgeting. Can anyone help how to do this question? Because this Monday is my due date to finish it.