The estimated start.docx - The estimated start-up capital for the business makes the management team to now come up with ways of funding this budget The

# The estimated start.docx - The estimated start-up capital...

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The estimated start-up capital for the business makes the management team to now come up with ways of funding this budget. The firm has \$1,500,000 cash as at now. The \$500,000 of the capital has to be obtained externally. The business management intends to borrow the remaining amount from financial institutions that eligible for offering finances viable businesses like this one. It is intending to borrow from commercial banks in Algeria. According to the Trading Economics (2019) data, there has been a great improvement in the financial and capital sectors in Algeria. Therefore, commercial banks are able to offer business loans at quite considerable and affordable interest rates. The commercial banks lending rate is interest rate is 5.4 %. This clearly indicates that there is reduced cost of doing business. 3.6.2 EcoMax Plastics Ltd

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Unformatted text preview: As shown in Table 3.2 below, the company will start making profits as from third year. Table 3.2 : EcoMax Plastics Ltd Projected Costs and Revenue (\$) Item Year 1 Year 2 Year 3 Year 4 Year 5 Revenue 100,000.00 130,000.00 169,000.00 219,700.00 285,610.00 cost of sales 50,000.00 65,000.00 84,500.00 109,850.00 142,805.00 Gross profit 50,000.00 65,000.00 84,500.00 109,850.00 142,805.00 Expenses Rent 12,500.00 12,500.00 12,500.00 12,500.00 12,500.00 wages &amp; salaries 40,000.00 44,000.00 48,400.00 53,240.00 58564.00 Ads &amp; marketing 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 Insurance 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 Maintenance 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 Total Expenses 62,500.00 66,500.00 70,900.00 7574.00 81,060.00 Net Income (Loss) (2,500.00) (1,500.00) 13,600.00 34,110.00 61,741.00 Source : Author...
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• Spring '15
• Mohamed Patel

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