COMPSYS is a start-up computer company. This year, the first year of operations, the company expects to

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COMPSYS is a start-up computer company. This year, the first year of operations, the company expects to reach a Sales Revenue of $750,000. The company expects its sales to grow at a rate of 15% per year. Its Cost of Goods Sold (COGS) is running at 34% of Sales Revenue, and is expected to remain at that rate. Its Selling Costs are 12% of Sales in the first year and are expected to increase at 3% per year after that. Its General and Administrative Costs (including Research and Development) are $410,000 this year, and are scheduled to rise at 4% every year after that. Earnings Before Taxes (EBT) is Sales Revenue less Cost of Goods Sold, Selling Costs, General and Administrative Costs. Taxes are 25% of Earnings Before Taxes, if the Earnings Before Taxes are greater than zero but less than or equal to $50,000. If earnings are greater than $50,000 per year, then the tax rate is 35%. Use IF statements for computing taxes.

a) Design and implement a worksheet to make a 5-year income statement projection for COMPSYS starting from this year. First, plan the format and layout of your worksheet areas. You should have separate areas for documenting the spreadsheet, indicating areas of the worksheet, and identifying assumptions with well-labeled separate cells for each of the growth rates and proportional factors. You should have a separate row for each item in the income statement and a separate column for each year. The final row should be for Earnings After Taxes. Use the Fill operation wherever possible.

b) Calculate the Net Present Value (NPV) of the Earnings After Taxes for the 5 years. Use a Discount Rate of 7%. Provide a label to indicate the results and place the value at the bottom of your worksheet.

c) Format your spreadsheet in an attractive manner. The first sheet should contain a brief documentation of the software package that you develop. The second sheet should be the EXCEL model. Here, the assumptions (given in the initial paragraph) should be first stated followed by the actual spreadsheet. The third sheet should contain the graphs you generate.