| | NFL SPORTS TEAM JACKSONVILLE JAGUARS |
| | pro-forma Profit and loss a/c for the five years ended |
| | | | | | | | | | | | | | | | cash budget |
| year | 1 | 2 | 3 | 4 | 5 | | FIVE YEARS FINANCIAL PROJECTION | | | | | | | | | year | 1 |
| revenue 'millions' | 511.88 | 453.06 | 498.36 | 548.19 | 603 | | year | 1 | 2 | 3 | 4 | 5 | | | | receipts- bal b/f |
| Variable cost | $102.38 | $90.61 | $99.67 | $109.64 | $120.60 | | revenue 'millions' | 511.88 | 453.06 | 498.36 | 548.19 | 603 | | | | adult tickets | 68 |
| fixed cost | $400.00 | $200.00 | $200.00 | $200.00 | $200.00 | | Variable cost | $102.38 | $90.61 | $99.67 | $109.64 | $120.60 | | | | young adults | 28.88 |
| depreciation | $80.00 | $80.00 | $80.00 | $80.00 | $80.00 | | fixed cost | $400.00 | $200.00 | $200.00 | $200.00 | $200.00 | | | | Sponsorships/Grants & Dep. | 495 |
| PROFIT BEFORE TAX | -$70.50 | $82.45 | $118.69 | $158.55 | $202.40 | | depreciation | $80.00 | $80.00 | $80.00 | $80.00 | $80.00 | | | | | 591.88 |
| tax at 21% | -$14.80 | $17.31 | $24.92 | $33.30 | $42.50 | | EBIT | -$70.50 | $82.45 | $118.69 | $158.55 | $202.40 | | | | fixed & variable cost | $502.38 |
| PROFIT AFTER TAX | -$55.69 | $65.13 | $93.76 | $125.26 | $159.90 | | tax at 21% | -$14.80 | $17.31 | $24.92 | $33.30 | $42.50 |
| | | | | | | | PROFIT AFTER TAX | -$55.69 | $65.13 | $93.76 | $125.26 | $159.90 | | | | tax | $14.80 |
| | | | | | | | ADD DEPRECIATION | $80.00 | $80.00 | $80.00 | $80.00 | $80.00 | | | | total payments | $517.18 |
| | | | | | | | CASHFLOWS | $24.31 | $145.13 | $173.76 | $205.26 | $239.90 | | | | net cash | $74.70 |
| | | | | REVENUE |
| Year One Income | | | | | | | YR | cashflow | pvif | pv - millions |
| incremental intial cash outflow=$100 million | | | | | | | 1 | $24.31 | $0.91 | $22.10 |
| expected life = 10yrs | | | | | | | 2 | $145.13 | $0.83 | $119.94 |
| salvage value = 0 | | | | | | | 3 | $173.76 | $0.75 | $130.55 |
| Yearly income growth = 10% | | | | | | | 4 | $205.26 | $0.68 | $140.19 |
| adults & Over 14 50000 @ 85$/match/16matches/1 season per year | | | | 68 | | | 5 | $239.90 | $0.62 | $148.95 |
| 6-14= 20000@69$/16/1 | | | | 22.08 | | | PRESENT VALUE CASH INFLOW | | | $561.73 |
| UNDER 6 [email protected]$/16/1 | | | | 6.8 | | | pv cash outflow | | | $100.00 |
| | | | | 96.88 | | | net present value | | | $461.73 |
| Sponsorships | | | | 315 |
| Contribution City of Birmingham | | | | 100 |
| | | | | 511.88 |
| | | Interpretations |
| | | Analysis shows the year one income which includes gate receipts, sponsorships and income from the league. This amount minus the 100 million from the city of Birmingham will be the bais for year 2-5. First year expenses includes cost to renovate staidum which is estimated to be 200 million, year 2-5 only includes salaries as fixed expenses. The data overall shows a healthy investment decision since the net present value is positive, the company should consider moving to Birmingham. |
| Stadium cost reference: https://www.fromthisseat.com/index.php/blog/17156-nfl-stadiums-construction-cost-rankings |
| | | | References |
| | | | Shrieves, R. E., & Wachowicz Jr, J. M. (2001). Free cash flow (FCF), economic value added (EVA™), and net present value (NPV):. a reconciliation of variations of discounted-cash-flow (DCF) valuation. The engineering economist, 46(1), 33-52. |
| | | | Ye, S., & Tiong, R. L. (2000). NPV-at-risk method in infrastructure project investment evaluation. Journal of construction engineering and management, 126(3), 227-233. |
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PMT2220AssignWk4.xlsx
