Question

My Mediterranean cafe will require an initial startup budget of $100,000 to cover the cost of equipment, furniture, supplies, licenses, and other startup costs. This budget includes the cost of leasing a space in a desirable location, purchasing and installing kitchen equipment, buying furniture, purchasing food and beverage supplies, and obtaining necessary licenses and permits. . I anticipate needing approximately $50,000 for furniture and equipment and another $30,000 for the lease of a convenient, desirable location. There is also the cost of renovations and repairs to the restaurant, which I estimate to be $10,000 and another $10,000 for permit license and lawyers’ fees.

Submit a paper where you do the following

-Prepare the pro forma financial statements.

-Based on your best understanding at this point, you will prepare a consolidated balance sheet, statement of cash flows, and income statement for the first year.

-Explain your pro forma statements in an accompanying document.

-Along with these pro forma financial statements, you will prepare an explanation discussing how you arrived at the various figures.

-Provide a list of your top three choices to secure funding for your business idea. Be sure to discuss why you have made this choice.

-Explain what strategy you will use to entice investors to invest in your project and why you chose this strategy.

-Identify and analyze your venture’s critical success factors and determine what your medium and long-term goals are for your business.

Answer 1

To prepare the pro forma financial statements for a Mediterranean cafe, analyze the explicit and implicit costs associated with the business. Subtract the explicit costs from the projected revenue to determine the accounting profit. Don't forget to consider the opportunity cost of quitting a current job.

Step-by-step explanation:

To prepare the pro forma financial statements for your Mediterranean cafe, you will need to analyze the various costs and revenues associated with your business. Start by calculating the explicit costs, which include the costs of equipment, furniture, lease, renovations, permits, and legal fees.

In your case, the explicit costs amount to $85,000. Next, subtract the explicit costs from your projected revenue of $200,000 to determine your accounting profit, which is $115,000. However, it's important to consider the implicit costs as well, such as the opportunity cost of quitting your current job. These costs should be accounted for in your financial analysis.