Cash Flow Statements and Analysis: Artisan Bread Co Start Up

Artisan Bread Co Start Up

Grant has been working in the baking industry for about two decades. He started out as a miller in a company in Germany, trained at one of the top milling schools in Switzerland, and rapidly progressed to become the head miller at a flourmill in Africa then the USA. Grant has had a close association with bakers through his work; his product has after all been the core raw material of bakers on three continents. In the last ten years, he has observed a gradual change in the bread industry, and in particular he has noticed changes in consumer preferences.

After having worked for large corporations for a long time, Grant is considering starting up his own company with a couple of partners. At first he was inclined to either start a small mill. He however found that the initial investment was prohibitive. Considering his skills a while longer, he realized that he was in an enviable position to shift from milling into specialty milling and baking. He would no longer be running large mills. He found that the prospect of trying his hand at very specialized milling, such as stone grinding, to be very appealing. This was accentuated by the possibility of combining his milling skills with those of a colleague, John, a baker. Together they could redefine the idea of an artisan bakery. Grant was sure that they could succeed at this endeavor.

See the attached document for the rest of the scenario.
1. Show the expected cash flows and all the assumptions made in their determination.
2. Provide an analysis of the cash flows that include the main analysis measures such as the IRR, NPV, etc. You should discuss these results, and in particular, you should be able to identify any peculiarities should they arise.