Fina 470 Cashflow and Inc budget project

Fina 470 Cashflow and Inc budget project - Austin...

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Austin Consolidated Industries - Product Line - Fina 470 Three year Income Statement Budget Years 2011 - 2013 Assumptions related to the income projections: Sales for 2010 200 Sales growth rate 10% Variable cost: Amounts as a % of sales 65% (Assumed that this is the variable portion of cost of goods sold) Operation cost in 2011 50 Annual increases 5% Includes depreciation of equal to 30% of operation costs (Assume that the operation cost are all part of cost of goods sold) Inaddition to selling costs, our budget needs to reflect our product line allocation of corporate costs. 2011 2.0 2012 4.0 Why such a larger increase? 2013 5.0 Selling and admistrative expense: 2011 25 2012 26 2013 28 Why such a larger increase? Interest expense: 2011 1.0 2012 1.4 2013 2.0 Why an increase with not increase in debt? Income tax rate 38% (Assume that there are no permament or timing difference related to revenue and expense items) Assumptions related to the statement of change: Cash balance to remain at
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Fina 470 Cashflow and Inc budget project - Austin...

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