Angela Deon

Madelynn Hughes
Dan Koon

JUMPING OFF
THE WALLS
 Company Overview
 Service
Trampoline and Rock Climbing
Sports Center
 Customers
Children and Adults
College Students
Active Families and Teens
 Geographic Area: Harrisburg, PA
 Company Overview
 Competitors
Climbnasium, Inc.
○ Mechanicsburg
Mighty Dog Family Fun
○ Columbia
Champs Bounce Fun Plex
○ Shamokin Dam
The Lazer Factory
○ Annville
Other Rock Climbing and Fitness Centers
 Company Overview
 Competitive Advantage
One of a Kind
Extreme Recreation
Hobbies
New Age Exercise & Fitness Programs
Local Markets
Untouched Demographic
 Company Overview
 Advertise
Newspapers and School Paper
Website
Distribute Flyers
Billboard on Turnpike
Local Radio
Commercials
Coupons
Special Offer Nights
○ Family Night, College Night, Tween Night
Layout
 Services
 Trampoline
Day Visits
Adult Fitness Class
Day Care Jump Class
 Rock Climbing
Day Visits
Introduction Instruction - Required
Additional Instruction
 Cost for Customers
 Trampoline
Per Visit $7.00
Per Adult Fitness Class $10.00
Per Day Care Jump Class $5.00
Monthly Rate if Pay for 6 Months $56.00
 Rock Climbing
Per Visit $14.00
Introduction Instruction $35.00
Additional Instruction $25.00
 Combination Packages
Trampoline and Rock Wall $20.00 per visit
Per month $150.00
 Costs: Salaries
 Rock Wall Instructors
$8/hr x 2 instructors x 97 hrs/week x 52 weeks
= $100,880.00/year
 Trampoline Fitness Instructors
$8/hr x 2 instructors x 20 hrs/week x 48 weeks
=$15,360.00/year
 Managers
15/hr x 3 managers x 97 hrs/week x 52 weeks
= $226,980.00/year

Total Costs of Salaries $343,220.00

 Estimated Revenue
 Trampoline Estimated Revenue: Non class Visits
Monday through Friday: estimate 30
○ 30 people x 5 days x 52 weeks x $7/visit
= $54,600.00
Saturday & Sunday: estimate 150 people/day
○ 150 people x 2 days x 52 weeks x $7/visit
= $109,200.00

Rough estimate from guests = $163,800.00

 Estimated Revenue
 Trampoline Estimated Revenue: Classes
Adult Fitness Classes:
○ 4 classes M-F with 7-10 people
minimum 7 people x 20 classes x $10/class
=$1,400.00/week
○ 2 classes Sat. & Sun. with 8-15
minimum 8 people x 4 classes x $10/class
= $320.00/week
($1400 + $320) x 48 weeks = $82, 560.00
Daycare Jump Class:
○ 4 classes M-F with 5-10 kids
minimum of 5 kids x 20 classes x $5/class
= $500.00/week
○ 2 classes Sat. & Sun. with 8-14 kids
minimum 8 kids x 4 classes x $5/class
= $160.00/week
($500 + $160) x 48 weeks = $31,680.00
Total Trampoline Revenue = $278,040.00
 Estimated Revenue
 Rock Climbing Estimated Revenue: Visits
Monday through Friday: estimate 30 people/day
○ 30 people x 5 days x 52 weeks x $14/visit
= $109,200.00
Saturday and Sunday: estimate of 120
people/day
○ 120 people x 2 days x 52 weeks x $14/visit
= $174,720.00

Total visits per day = $283,920.00

 Estimated Revenue
 Rock Climbing Estimated Revenue: Classes
Introduction Individual: estimate 1 instruction/day
○ 1 person x 7 days x 48 weeks x $35/class
= $11,760.00
Additional classes: estimate 3 instructions/day
○ 3 people x 7 days x 48 weeks x $25/class
= $25,200.00

Total Estimated Revenue from Rock Climbing

= $320,880.00  
Total Estimated Revenue
$598,920 (estimated revenue)
- $343,220 (estimated salaries)
- $16,000 (estimated insurance)
- $7,000 (estimated utilities)
= $232,700.00
 5 year Profit and Loss Statement
  Year
  1 2 3 4 5

Average Daily Revenues $1,640.88 $1,852.32 $2,067.18 $2,282.45 $2,347.98

Days/Year 365 365 365 366 365

Revenues $598,920.00 $676,096.80 $754,520.70 $835,376.70 $857,012.70

Variable Costs (gym equipment) $343,220.00 $343,220.00 $343,220.00 $344,160.33 $343,220.00

Fixed Costs $23,000.00 $23,000.00 $23,000.00 $23,000.00 $23,000.00

Depreciation $9,762.31 $15,435.28 $11,443.92 $8,624.40 $6,734.47

EBIT $222,937.69 $294,441.52 $376,856.78 $459,591.97 $484,058.23

Taxes (34%) $75,798.82 $100,110.12 $128,131.30 $156,261.27 $164,579.80

Net Income $147,138.88 $194,331.40 $248,725.47 $303,330.70 $319,478.43

MACRS: Fixed Equipment
 Building, Initial Value: $55,000.00
Year MACRS Rate Depreciation Ending BV
1 3.17% $1,746.03 $53,253.97
2 3.17% $1,746.03 $51,507.94
3 3.17% $1,746.03 $49,761.90
4 3.17% $1,746.03 $48,015.87
5 3.17% $1,746.03 $46,269.84
6 3.17% $1,746.03 $44,523.81
7 3.17% $1,746.03 $42,777.78
8 3.17% $1,746.03 $41,031.75
9 3.17% $1,746.03 $39,285.71
10 3.17% $1,746.03 $37,539.68
11 3.17% $1,746.03 $35,793.65
12 3.17% $1,746.03 $34,047.62

MACRS: Building 13
14
15
3.17%
3.17%
3.17%
$1,746.03
$1,746.03
$1,746.03
$32,301.59
$30,555.56
$28,809.52
16 3.17% $1,746.03 $27,063.49
17 3.17% $1,746.03 $25,317.46
18 3.17% $1,746.03 $23,571.43
19 3.17% $1,746.03 $21,825.40
20 3.17% $1,746.03 $20,079.37
21 3.17% $1,746.03 $18,333.33
22 3.17% $1,746.03 $16,587.30
23 3.17% $1,746.03 $14,841.27
24 3.17% $1,746.03 $13,095.24
25 3.17% $1,746.03 $11,349.21
26 3.17% $1,746.03 $9,603.17
27 3.17% $1,746.03 $7,857.14
28 3.17% $1,746.03 $6,111.11
29 3.17% $1,746.03 $4,365.08
30 3.17% $1,746.03 $2,619.05
31 3.17% $1,746.03 $873.02
31.5 1.59% $873.02 $0.00
 Change in NWC
Year Revenues NWC Cash Flow

0 $3,000.00 -$3,000.00

1 $598,920.00 $143,740.80 -$140,740.80

2 $676,096.80 $162,263.23 -$18,522.43

3 $754,520.70 $181,084.97 -$18,821.74

4 $835,376.70 $200,490.41 -$19,405.44

5 $857,012.70 $205,683.05 -$5,192.64

Initial $3,000 NWC

Then 24% of Revenues
 Projected Cash Flows
Year
0 1 2 3 4 5
I. Operating cash flow

EBIT $222,937.69 $294,441.52 $376,856.78 $459,591.97 $484,058.23

Depreciation $9,762.31 $15,435.28 $11,443.92 $8,624.40 $6,734.47
Taxes -$180,083.62 -$193,129.12 -$210,826.43 -$226,849.71 -$246,097.21

Operating cash flow $52,616.38 $116,747.68 $177,474.27 $241,366.66 $244,695.49

II. Net Working Capital
Initial NWC -$3,000.00
Change in NWC -$140,740.80 -$18,522.43 -$18,821.74 -$19,405.44 -$5,192.64
NWC recovery N/A
Total change in NWC -$3,000.00 -$140,740.80 -$18,522.43 -$18,821.74 -$19,405.44 -$5,192.64
III. Capital Spending
Initial outlay -$366,220.00
Aftertax salvage N/A
Capital spending -$366,220.00
 Total Projected Cash Flows
Year
0 1 2 3 4 5
Operating cash flow $52,616.38 $116,747.68 $177,474.27 $241,366.66 $244,695.49
Change in NWC -$3,000.00 -$140,740.80 -$18,522.43 -$18,821.74 -$19,405.44 -$5,192.64
Capital spending -$366,220.00
Total project cash flow -$369,220.00 -$88,124.42 $98,225.25 $158,652.53 $221,961.22 $239,502.85
Cumulative cash flow -$369,220.00 -$457,344.42 -$359,119.17 -$200,466.64 $21,494.58 $260,997.43

Discounted cash flow @

15% -$369,220.00 -$76,629.93 $74,272.40 $104,316.61 $126,907.05 $119,075.24
Net present value (15%) -$21,278.62
Internal Rate of Return 13.41%
Payback 3.90316066 years

AAR = 71.31%
PI at 15% Return Rate = - 0.058103392
 Final Analysis
 Starting Capital: $500,000
 Payback: 3.9 years
 Required Rate of Return: 15%
Lose in first 5 years
NPV is Negative
 Potential for Future Profitability
 Expansion
 Merchandise
 Expand Fixed Assets
“Bounce Off the Walls” with
Trampolines
Additional Rock Walls
 Updates to Equipment
 Additional Staff and Services
 Special flooring and Equipment
 Bond Valuation
 Security of Bond
 Seniority of Bond
 Sinking Fund
 Call Provision with specified
dates and prices
 Deferred Call with Call provision
 Make-Whole Call Provision
 Bond Valuation
 Positive Covenants
Keep High Standard of Service
Maintain Good Condition of Assets
Provide Audited Financial Information
 Negative Covenants
Cannot Merge with Another Firm
Will Not Acquire Another Company’s
Bond
 Conversion Feature
 Floating-Rate Coupon
Questions?