AFM131 Lecture 19: AFM131 Team Assignment-note
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a. Within this workbook there is a worksheet labeled "AdjustedTrial Balances". Within that worksheet you will find fullycompleted trial balances for three years. Also within this workbookyou will find worksheets for comparative income statements andcomparative balance sheets. Using the trial balances andcomparative financial statements you need to calculate a variety ofratios. You will find the required ratios in the worksheet labeled"Ratios Historical". Complete all the required ratios. You MUST useformulas and/or linking to compute your ratios. You can not simplyhard key the answers. You must reference the appropriate data fromthe trial balances and comparative financial statements.
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AC Speed | |||||||||
Income Statement | |||||||||
12/31/15 | 12/31/14 | 12/31/13 | 12/31/12 | 5/31/15 | |||||
Sales Revenue | |||||||||
Sales | 8,850,000 | 8,874,000 | 9,051,480 | 9,141,995 | 725,000 | ||||
Less: Sales Returns & Allowances | 0 | 0 | 0 | 0 | 0 | ||||
Sales Discounts | 0 | 0 | 0 | 0 | 0 | ||||
Net Sales | 8,850,000 | 8,874,000 | 9,051,480 | 9,141,995 | 725,000 | ||||
Cost of Goods Sold | 7,656,000 | 7,661,551 | 7,625,748 | 7,852,006 | 638,000 | ||||
Gross Profit | 1,194,000 | 1,212,449 | 1,425,732 | 1,289,989 | 87,000 | ||||
Operating Expenses | |||||||||
Wage Expense (hourly workers) | 120,000 | 122,400 | 124,848 | 126,096 | 10,000 | ||||
Salaries Expense (Exempt Staff) | 360,000 | 367,200 | 374,544 | 378,289 | 30,000 | ||||
Marketing Expense | 288,000 | 293,760 | 299,635 | 302,632 | 24,000 | ||||
Travel and Entertainment Expense | 27,600 | 28,152 | 28,715 | 29,002 | 2,300 | ||||
Bad Debt Expense | 0 | 0 | 0 | 0 | 0 | ||||
Property Tax Expense | 0 | 0 | 0 | 0 | 0 | ||||
Office Maintenance & RepairExpense | 6,000 | 6,120 | 6,242 | 6,305 | 500 | ||||
Legal Expenses | 198,600 | 202,572 | 206,623 | 208,690 | 16,550 | ||||
Insurance Expense | 24,000 | 24,480 | 24,970 | 25,219 | 2,000 | ||||
Utilities Expense | 12,000 | 12,240 | 12,485 | 12,610 | 1,000 | ||||
Office Supplies Expense | 3,480 | 3,550 | 3,621 | 3,657 | 290 | ||||
Telecommunications Expense | 660 | 673 | 687 | 694 | 55 | ||||
Depreciation Expense - Equip &Furniture - Warehouse | 1,980 | 2,020 | 2,060 | 2,081 | 165 | ||||
Depreciation Expense - Equip &Furniture - Office | 1,680 | 1,714 | 1,748 | 1,765 | 140 | ||||
Total Operating Expenses | 1,044,000 | 1,064,880 | 1,086,178 | 1,097,039 | 87,000 | ||||
Operating Income | 150,000 | 147,569 | 339,554 | 192,950 | 0 | ||||
Other Revenues & Gains | |||||||||
Rent Income | 0 | 0 | 0 | 0 | #REF! | ||||
0 | 0 | 0 | 0 | #REF! | |||||
Other Expenses & Losses | |||||||||
Interest Expense | 0 | 0 | 0 | 0 | 0 | ||||
0 | 0 | 0 | 0 | 0 | |||||
Net Income | 150,000 | 147,569 | 339,554 | 192,950 | #REF! | ||||
Common Dividends | 19,200 | 16,130 | 15,000 | 1,600 | |||||
Weighted Average Common Shares | 65,000 | 65,000 | 65,000 | 62,500 | |||||
Market Price per Common Share | 35.00 | 34.00 | 31.00 | 34.00 |
AC Speed | |||||||||
Balance Sheet | |||||||||
12/31/15 | 1/0/00 | 12/31/14 | 1/0/00 | 12/31/13 | 1/0/00 | 12/31/12 | 1/0/00 | 5/31/15 | |
ASSETS | |||||||||
Current Assets | |||||||||
Cash | 294,000 | 311,640 | 342,804 | 373,656 | 75,000 | ||||
Accounts Receivable | 948,800 | 846,728 | 931,401 | 1,015,227 | 490,000 | ||||
Less: Allowance for Doubtful Accounts | 16,800 | 17,808 | 19,589 | 21,352 | 15,000 | ||||
Net Accounts Receivable | 932,000 | 828,920 | 911,812 | 993,875 | 475,000 | ||||
Merchandise Inventory | 601,856 | 637,967 | 701,764 | 764,923 | 334,000 | ||||
Office Supplies | 2,240 | 2,374 | 2,612 | 2,847 | 2,000 | ||||
Prepaid Insurance | 15,680 | 16,621 | 18,283 | 20,111 | 14,000 | ||||
Total Current Assets | 1,845,776 | 1,797,523 | 1,977,275 | 2,155,412 | 900,000 | ||||
Long-Term Assets | |||||||||
Land | 2,000,600 | 2,000,600 | 2,000,600 | 2,000,600 | 2,000,600 | ||||
Equipment & Furniture - Warehouse | 11,200 | 11,872 | 13,059 | 14,235 | 10,000 | ||||
Accumulated Depreciation - Equip &Furn. - Warehouse | 2,128 | 2,256 | 2,481 | 2,705 | 1,900 | ||||
Book Value: Equipment & Furniture -Warehouse | 9,072 | 9,616 | 10,578 | 11,530 | 8,100 | ||||
Equipment & Furniture - Office | 9,520 | 10,091 | 11,100 | 12,099 | 8,500 | ||||
Accumulated Depreciation - Equip &Furn. - Office | 1,792 | 1,900 | 2,089 | 2,278 | 1,600 | ||||
Book Value: Equipment & Furniture -Office | 7,728 | 8,192 | 9,011 | 9,822 | 6,900 | ||||
Total Long-Term Assets | 2,017,400 | 2,018,408 | 2,020,189 | 2,021,952 | 2,015,600 | ||||
TOTAL ASSETS | 3,863,176 | 3,815,931 | 3,997,464 | 4,177,364 | 2,915,600 | ||||
LIABILITIES | |||||||||
Current Liabilities | |||||||||
Accounts Payable | 812,432 | 861,178 | 947,296 | 978,338 | 948,600 | ||||
Wages Payable | 0 | 0 | 0 | 0 | 0 | ||||
Interest Payable | 0 | 0 | 0 | 0 | 0 | ||||
Dividends Payable | 0 | 0 | 0 | 0 | 0 | ||||
Unearned Rent | 0 | 0 | 0 | 0 | 0 | ||||
Total Current Liabilities | 812,432 | 861,178 | 947,296 | 978,338 | 948,600 | ||||
Long-Term Liabilities | |||||||||
Notes Payable | 0 | 0 | 0 | 0 | 0 | ||||
Bonds Payable | 0 | 0 | 0 | 0 | 0 | ||||
Mortgage (Warehouse) Payable | 124,000 | 131,440 | 144,584 | 157,597 | 200,000 | ||||
Total Long-Term Liablities | 124,000 | 131,440 | 144,584 | 157,597 | 200,000 | ||||
TOTAL LIABILITIES | 936,432 | 992,618 | 1,091,880 | 1,135,935 | 1,148,600 | ||||
STOCKHOLDER'S EQUITY | |||||||||
Paid-in Capital | |||||||||
Capital Stock | 65,000 | 65,000 | 65,000 | 65,000 | 60,000 | ||||
Additional Paid-in Capital | 1,545,000 | 1,545,000 | 1,545,000 | 1,545,000 | 1,341,000 | ||||
Retained Earnings | 1,316,744 | 1,213,313 | 1,295,584 | 1,431,429 | #REF! | ||||
Total Paid-in Capital & RetainedEarnings | 2,926,744 | 2,823,313 | 2,905,584 | 3,041,429 | #REF! | ||||
TOTAL LIABILITIES & CAPITAL | 3,863,176 | 3,815,931 | 3,997,464 | 4,177,364 | #REF! | ||||
TOTAL ASSETS | 3863176 | 3815930.56 | 3997463.616 | 4177364.17 | 2915600 | ||||
TOTAL LIAB & EQUITY | 3863176 | 3815930.92 | 3997464.092 | 4177363.81 | #REF! | ||||
VARIANCE | 0 | -0.36 | 0 | 0 | #REF! |
12/31/15 | 12/31/14 | 12/31/13 | INDUSTRY | ||||
Liquidity | |||||||
Current Ratio (One decimal place) | 2.1 | 2.1 | 2.2 | ||||
Current Assets | |||||||
Current Liabilities | |||||||
Acid Test Ratio (One decimal place) | 1.3 | 1.3 | 1.6 | ||||
Cash | |||||||
A/R (Net) | |||||||
Short Term Investments | |||||||
Current Liabilities | |||||||
Receivables Turnover (One decimalplace) | 10.2 | 9.5 | 10 | ||||
Net Credit Sales | |||||||
Beg A/R | |||||||
End A/R | |||||||
Avg. A/R | |||||||
Inventory Turnover (One decimalplace) | 11.4 | 10.4 | 9.5 | ||||
CGS | |||||||
Avg. Inventory | |||||||
Profitability | |||||||
Profit Margin (% with two decimalplaces) | 1.66% | 3.75% | 3.5% | ||||
Net Income | |||||||
Net Sales | |||||||
Asset Turnover (two decimal places) | 2.27 | 2.21 | 1.9 | ||||
Net Sales | |||||||
Beginning Assets | |||||||
Ending Assets | |||||||
Average Assets | |||||||
Return on Assets (% one decimalplace) | 3.8% | 8.3% | 10.5% | ||||
Net Income | |||||||
Avg. Assets | |||||||
Return on Common Shareholders' Equity | |||||||
(One decimal place) | 5.2% | 11.4% | 18.3% | ||||
Net Income | |||||||
Preferred Dividends | |||||||
Beginning Common Equity | |||||||
Ending Common Equity | |||||||
Avg. Common Shareholders' Equity | |||||||
Earnings per Share (EPS) (Two decimalplaces) | 2.27 | 5.33 | 3.05 | ||||
Net Income | |||||||
Preferred Dividends | |||||||
Weighted Avg. Common SharesOutstanding | |||||||
Price-Earnings (P/E ) Ratio (Two decimalplaces) | 14.98 | 5.93 | 14.8 | ||||
Market Price per Share of Stock | |||||||
Earnings per Share | |||||||
Payout Ratio (% One decimal place) | 10.9% | 4.4% | 15.0% | ||||
Cash Dividends | |||||||
Net Income | |||||||
Solvency Ratios | |||||||
Debt to Total Assets Ratio (% One decimalplace) | 26.0% | 27.3% | 42.2% | ||||
Total Debt | |||||||
Total Assets | |||||||
Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2008 | |||||
Common Dividends | 19,200 | 16,130 | 15,000 | ||||
Weighted Average Common Shares | 65,000 | 65,000 | 63,750 | ||||
Market Price per Share | 35 | 34 | 31 |
Can you please help solve the formula portions and show theformulas used?
PROBLEM DATA
The University Club recently issued $1,500,000 of 10-year, 9%bonds at an effective interest rate of 10%. Bond interest ispayable annually.
REQUIREMENTS
1. You have been asked to calculate the issuance price of thebonds and prepare amortization schedules for any discount orpremium. The worksheet BONDS has been provided to assist you. Notethat the worksheet contains a scratch pad at the bottom that hasbeen preprogrammed to automatically compute and display therelevant cash flows needed for bond pricing.
2. The bond pricing formula will utilize the NPV (Net PresentValue) function on your spreadsheet program. The NPV function willautomatically compute the net present value of annual future cashflows discounted at a specific interest rate. The interest rateshould be expressed as a cell address.
BONDS | |||||
Bond Pricing andAmortization | |||||
Data Section | |||||
Face value of bond | $1,500,000 | ||||
Years to maturity * | 10 | ||||
Stated interest rate | 9.0% | ||||
Effective interest rate | 10.0% | ||||
* Worksheet is designed for use with bonds having amaturity of | |||||
12 years or less and paying interestannually. | |||||
Answer Section | |||||
Bond issue price | FORMULA1 | ||||
Amortization Schedule -Straight Line Method | |||||
Cash | Interest | (Disc.) | Bond | ||
Year | Paid | Amortization | Expense | Premium | Carrying Value |
0 | FORMULA2 | FORMULA3 | |||
1 | FORMULA4 | FORMULA5 | FORMULA6 | FORMULA7 | FORMULA8 |
2 | FORMULA9 | FORMULA10 | FORMULA11 | FORMULA12 | FORMULA13 |
3 | 0 | 0 | 0 | 0 | 0 |
4 | 0 | 0 | 0 | 0 | 0 |
5 | 0 | 0 | 0 | 0 | 0 |
6 | 0 | 0 | 0 | 0 | 0 |
7 | 0 | 0 | 0 | 0 | 0 |
8 | 0 | 0 | 0 | 0 | 0 |
9 | 0 | 0 | 0 | 0 | 0 |
10 | 0 | 0 | 0 | 0 | 0 |
11 | 0 | 0 | 0 | 0 | 0 |
12 | 0 | 0 | 0 | 0 | 0 |
Amortization Schedule -Effective Interest Method | |||||
Interest | Cash | (Disc.) | Bond | ||
Year | Expense | Paid | Amortization | Premium | Carrying Value |
0 | FORMULA14 | FORMULA15 | |||
1 | FORMULA16 | FORMULA17 | FORMULA18 | FORMULA19 | FORMULA20 |
2 | FORMULA21 | FORMULA22 | FORMULA23 | FORMULA24 | FORMULA25 |
3 | 0 | 0 | 0 | 0 | 0 |
4 | 0 | 0 | 0 | 0 | 0 |
5 | 0 | 0 | 0 | 0 | 0 |
6 | 0 | 0 | 0 | 0 | 0 |
7 | 0 | 0 | 0 | 0 | 0 |
8 | 0 | 0 | 0 | 0 | 0 |
9 | 0 | 0 | 0 | 0 | 0 |
10 | 0 | 0 | 0 | 0 | 0 |
11 | 0 | 0 | 0 | 0 | 0 |
12 | 0 | 0 | 0 | 0 | 0 |
Scratch Pad | |||||
Display of relevant cash flows | |||||
Annual | Bond | ||||
Year | Interest | Maturity | |||
1 | 135000 | 0 | |||
2 | 135000 | 0 | |||
3 | 135000 | 0 | |||
4 | 135000 | 0 | |||
5 | 135000 | 0 | |||
6 | 135000 | 0 | |||
7 | 135000 | 0 | |||
8 | 135000 | 0 | |||
9 | 135000 | 0 | |||
10 | 135000 | 1500000 | |||
11 | 0 | 0 | |||
12 | 0 | 0 | |||
Input Data | |||||||||||||||||||||||||
Month | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 |
Revenue | $ - | $ - | $ - | $ - | $ - | $ - | $ 2,500 | $ 2,875 | $ 3,306 | $ 3,802 | $ 4,373 | $ 5,028 | $ 5,783 | $ 6,650 | $ 7,648 | $ 8,795 | $ 10,114 | $ 11,631 | $ 13,376 | $ 15,382 | $ 17,689 | $ 20,343 | $ 23,394 | $ 26,903 | |
Monthly Revenue Growth Rate | 0% | 0% | 0% | 0% | 0% | 0% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | |
Terms of Revenue | |||||||||||||||||||||||||
Cash Sales (% ofrevenue) | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | |
N30 (% ofrevenue) | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | |
N60 (% ofrevenue) | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | |
Cost of Good Sold | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | |
Terms of Cost of Goods Sold | |||||||||||||||||||||||||
Cash Sales (% ofpurchases) | 0% | 0% | 0% | 0% | 0% | 0% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | 70% | |
N30 (% ofpurchases) | 0% | 0% | 0% | 0% | 0% | 0% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | 30% | |
N60 (% ofpurchases) | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | |
Cash Operating Costs | |||||||||||||||||||||||||
Compensation | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | |
Rent | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | |
Supplies | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | |
Other OperatingExpences | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | 15% | |
Accounting | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $115 | $132 | $152 | $175 | $201 | $231 | $266 | $306 | $352 | $405 | $465 | $535 | $615 | $708 | $814 | $936 | $1,076 | |
Advertizing | $350 | 350 | 350 | 350 | 350 | 350 | 403 | 463 | 532 | 612 | 704 | 810 | 931 | 1071 | 1231 | 1416 | 1628 | 1873 | 2153 | 2476 | 2848 | 3275 | 3766 | 4331 | |
Tax Rate | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | |
Income Statement | |||||||||||||||||||||||||
Month | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 |
Revenue | $0 | $0 | $0 | $0 | $0 | $0 | $2,500 | $2,875 | $3,306 | $3,802 | $4,373 | $5,028 | $5,783 | $6,650 | $7,648 | $8,795 | $10,114 | $11,631 | $13,376 | $15,382 | $17,689 | $20,343 | $23,394 | $26,903 | |
Cost of Goods Sold | $0 | $0 | $0 | $0 | $0 | $0 | $200 | $230 | $265 | $304 | $350 | $402 | $463 | $532 | $612 | $704 | $809 | $930 | $1,070 | $1,231 | $1,415 | $1,627 | $1,872 | $2,152 | |
Gross Profit | $0 | $0 | $0 | $0 | $0 | $0 | $2,300 | $2,645 | $3,042 | $3,498 | $4,023 | $4,626 | $5,320 | $6,118 | $7,036 | $8,091 | $9,305 | $10,701 | $12,306 | $14,151 | $16,274 | $18,715 | $21,523 | $24,751 | |
Compensation | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Rent | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | |
Supplies | 0 | 0 | 0 | 0 | 0 | 0 | 250 | 288 | 331 | 380 | 437 | 503 | 578 | 665 | 765 | 879 | 1,011 | 1,163 | 1,338 | 1,538 | 1,769 | 2,034 | 2,339 | 2,690 | |
Other operating Expences | 0 | 0 | 0 | 0 | 0 | 0 | 375 | 431 | 496 | 570 | 656 | 754 | 867 | 998 | 1,147 | 1,319 | 1,517 | 1,745 | 2,006 | 2,307 | 2,653 | 3,051 | 3,509 | 4,035 | |
Accounting | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | |
Advertizing | 350 | 350 | 350 | 350 | 350 | 350 | 403 | 463 | 532 | 612 | 704 | 810 | 931 | 1,071 | 1,231 | 1,416 | 1,628 | 1,873 | 2,153 | 2,476 | 2,848 | 3,275 | 3,766 | 4,331 | |
Earnings Before Taxes | -$650 | -$650 | -$650 | -$650 | -$650 | -$650 | $973 | $1,163 | $1,383 | $1,635 | $1,926 | $2,259 | $2,643 | $3,085 | $3,593 | $4,176 | $4,848 | $5,620 | $6,508 | $7,529 | $8,704 | $10,054 | $11,608 | $13,394 | |
Taxes | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Net Income | -$650 | -$650 | -$650 | -$650 | -$650 | -$650 | $973 | $1,163 | $1,383 | $1,635 | $1,926 | $2,259 | $2,643 | $3,085 | $3,593 | $4,176 | $4,848 | $5,620 | $6,508 | $7,529 | $8,704 | $10,054 | $11,608 | $13,394 | |
Cash Flow | |||||||||||||||||||||||||
Cash Collected from Revenue | $0 | $0 | $0 | $0 | $0 | $0 | $1,750 | $2,763 | $3,177 | $3,653 | $4,201 | $4,832 | $5,556 | $6,390 | $7,348 | $8,451 | $9,718 | $11,176 | $12,852 | $14,780 | $16,997 | $19,547 | $22,479 | $25,850 | |
Cash Payments on COGS | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $200 | $230 | $265 | $304 | $350 | $402 | $463 | $532 | $612 | $704 | $809 | $930 | $1,070 | $1,231 | $1,415 | $1,627 | $1,872 | |
Cash Operating Expenses ETC | $650 | $650 | $650 | $650 | $650 | $650 | $1,328 | $1,482 | $1,659 | $1,863 | $2,097 | $2,367 | $2,677 | $3,033 | $3,443 | $3,915 | $4,457 | $5,080 | $5,797 | $6,622 | $7,570 | $8,661 | $9,915 | $11,357 | |
Taxes | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Net Cash Flow | -$650 | -$1,301 | -$1,951 | -$2,601 | -$3,251 | -$3,902 | -$3,479 | -$2,398 | -$1,110 | $416 | $2,216 | $4,331 | $6,809 | $9,703 | $3,373 | $3,924 | $4,558 | $5,286 | $6,124 | $7,088 | $8,196 | $9,471 | $10,936 | $12,622 | |
Cash Account Balance | $3,000 | $2,350 | $1,049 | -$902 | -$3,503 | -$6,754 | -$10,655 | -$14,134 | -$16,532 | -$17,642 | -$17,226 | -$15,010 | -$10,679 | -$3,870 | $5,833 | $9,206 | $13,130 | $17,688 | $22,974 | $29,099 | $36,187 | $44,383 | $53,854 | $64,790 | $77,412 |
Compute, if possible, how much revenue would be needed tobreakeven in terms of cash flow. Comment on the financial viabilityof the venture. Would you suggest any changes? If so, what arethey? If you do, this becomes your âbaseâ model.