Cafe Case Study Essay
By observing the actual sales in the trend line it is possible to notice that the trend line is showing and increasing trend and it starts diminishing at the later stages. But there are likely chances to recover an upswing in the future. Mr. Dwayne should also consider and assume that these sales patterns will not be affected through external factors.
Mr. Dwayne’s Café and Service Center/Garage Business have been …show more content…
Dwayne is able to calculate the total completion time of the project with the help of the above network diagram. It takes 17 days to complete this project, but he must ensure that there are external factors such as suppliers supplying the materials and machines on time, efficiency of trailers and employee’s ability in learning how to use the new machines installed, are vitally important in deciding the total project completion time.
For the above car washing machines, it is possible for Mr. Dwayne to make use certain financial tools such as Net Present Values to calculate whether the investment project is going to be profitable, a viable project or not. Mr. Dwayne can assume the discounted factors for the present environment can be 8%. Consider future cash inflows and out flows for 5 years if the above project is going to be implemented.
Since the above project earns SR 1,940 as a positive value at the rate of 8% discount, the above investment can be considered as a profitable investment. Mr. Dwayne should understand that this Discounted Cash Flow method takes into account both time value and the profits too. Further he can also alter the rate of discount as per the time values and compare the Net Present Values, but sometimes preparing Discounted Cash Flows and Net Present Values could be a complex method and there are likely chances of including biased information