Valuation(second shee) - How we fund out initial investment...

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Unformatted text preview: How we fund out initial investment 1) Each Co-founders investe $10,000 which equal total of $60,000 2) We borrow 100k from the bank @ 5.5% interest, with our assets (trucks and equipments) as co 3) We borrow 150k from the bank @ 5.5% interest, with our revenues and our assets (trucks and Income Statement Assumptions: 1) Employee wages - will be increasing in proportion to the exact number of 2) Health Insurance will remain constant for the first year as we will not be hiring any further empl 3) Miscellaneous Expenses will also be expected to grow at approximately 1.25% per month or 15 4) Moving Supplies will be growing in direct proportion to the increase in sales, thus we decided to 5) Although Office supplies will not be directly influenced by the growth of sales, for indirect reaso 6) Payroll Taxes will be held constant for the first year. 7)Research and Development will be a non-factor until we enter our second year in which we und At which point we will spend 10% of sales on R&D and maintenance expense of 12,50 8) Rental Expenses- Will remain constant since we have leases multi-year leases. 9) Utilities- Similar to Rental Expense should remain constant. 10) Vehicle Insurance- Will remain constant the first year and will increase as we continue to emp 11) Workers Compensation- Will increasing in direct relation to expansion in employment Balance Sheet Assumptions: 1) We assume that 75% of our sales will be paid in cash and 25% will be in Account Receivable. 2) For our expenses, 80% of total expenses will be paid in cash and 20% will be in credit 3) We assume our Intangible assets (patents, copyright, and website) will increase in value by 5% Start up company B = 2.5 Rm = 11.7% 30 year t-bill Rf = 2.8% CAPM = 25.05% 3) Miscellaneous Expenses will be phone service, internet service, Class A lincense, Fuel consum Wage Expanses grow at the same rate as the sales growth ollateral equipmetns) as collateral loyees. All further expenses related to Medical Insurance will be increasing by $1,100 per employe 5% a year. to calculate based upon change in sales. ons we assume a 3.0 % growth. dergo development of our website and software for house blueprint layout. 00, growing at 10 percent annuall ployee and purchase more moving vehicles. To reduce default risk, we only gives out credit to customers with very big jobs and has excellent c per year mption. ee....
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This note was uploaded on 09/08/2010 for the course BUS 173C at San Jose State University .

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Valuation(second shee) - How we fund out initial investment...

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