Week 3 Discussion 1 BUS 401.doc - . . .Usingtheexa

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Assume you are planning to start a new business that will sell innovative consumer  products via an online store.  You will be pitching your idea to potential investors with  the goal of securing funding.  Your investors are very savvy and want to review a well  thought out financial forecast.  Using the examples provided in Chapter 6, construct a  hypothetical 5 year Cash Flow estimate including depreciation and tax-related amounts.   Be sure to show your detailed calculations and document at least five key assumptions.   Also, explain why cash flows occurring at different intervals should be adjusted for a  common date in order to allow for a proper comparison. Our company sells key fobs. They are not just ordinary key fobs-these are voice activated and will allow a user to start up a car based on their voice. They sell for $30 each. Given  that the purchase price of the equipment is $10,000 (with the depreciation set at  $2000/per year for a period of 5 years), the initial key fobs to be sold in Year 1 is 2000.  Years 2 and 3 are predicted to go up to 2,500, while Years 4 and 5 leveled up to $3000.  Assume that the rent is $20,000 a year, and it stays that way. To add this, “employee's  wages'' are set aside at $15,000 per year. The discounted rate at 10%.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern