The Barakat

The owner of a restaurant serving Middle Eastern cuisine realizes the need for a bigger location due to extreme customer congestion. He is contemplating moving the restaurant to a new location that would require $255,000 of renovations in order to keep pace with his growing consumer base. Students are asked to: 1) identify those items relevant to the decision and categorize them as either recurring or one-time flows; 2) understand that recurring flows consist of both fixed and variable costs; 3) identify investments, including working capital accounts; 4) calculate return on investment and 5) make a decision based on both qualitative and quantitative analysis.