Question: Could you please saw me the claculation Using the PowerPoint Lecture Creating Projections, create a new set of projections for Years X E and X
Could you please saw me the claculation
Using the PowerPoint Lecture Creating Projections, create a new set of projections for Years X E and X +1 E. (an Excel File - Provided as a separate file in this Week 7 Content Folder). Please make sure you put your name in the appropriate box on the worksheet! All historical information remains the same (through Year X-1). Use this new set of assumptions: Revenue growth: 30% Year X 30% Year X + 1 1% improvement in Gross Margin for Year X E (from year X-1). No further change in the Gross Margin for Year X+1. 1% improvement in Selling in Year X E. Same level in Year X+1 E. G&A remains constant on a common size basis. $10,000 increase in R&D in X E. Same R&D level in Year X+1 E. Basic Shares outstanding 3,000,000. A new section of the existing plant is constructed for $300,000. This new construction is depreciated over 30 years using the straight line method. All other depreciation remains the same for the years X E and X+1 E. The plant is financed with a $300,000 10 year bond with a fixed interest payment of 10% annually. The Company, for the first time, grants 500,000 options to various members of management with an exercise price of $1.00. These options are granted on the first day of Year X E. There are no other options, warrants or convertible securities. The average stock price for Year X E and Year X+1 E is projected to be $5.00. All other interest payments, interest income and tax rates remain the same.
| Year X - 1 | Year X E | Year X + 1 E | |||
| Revenue | $ 1,440,000 | 100.0% | |||
| Cost of Goods Sold | 921,600 | 64.0% | |||
| Gross Profit | 518,400 | 36.0% | |||
| Selling | 158,400 | 11.0% | |||
| General and Administrative | 108,000 | 7.5% | |||
| Research and Development | 40,000 | 2.8% | |||
| Depreciation and Amortization | 30,000 | 2.1% | |||
| Total Operating Expenses | 336,400 | 23.4% | |||
| Operating Income | 182,000 | 12.6% | |||
| Interest costs | 5,000 | 0.3% | |||
| Interest income | 4,000 | 0.3% | |||
| Pre-Tax Income | 181,000 | 12.6% | |||
| Tax (35%) | 63,350 | 4.4% | |||
| Net Income | $ 117,650 | 8.2% | |||
| Earnings Per Share - Basic | $ 0.04 | ||||
| Earnings Per Share - Diluted | |||||
| Shares Outstanding | 3,000,000 | ||||
| Shares For Diluted | |||||
| A Options | 500,000 | ||||
| Ex Price | $ 1.00 | ||||
| Stock Price | $ 5.00 | ||||
| Proceeds | $ 500,000 | ||||
| New Share structure | 3,500,000 | ||||
| Buy Back Shares | 100,000 | ||||
| Shares for Diluted Calculations | 3,400,000 | ||||
| Year X E | Year X + 1 E | ||||
| Revenue | $ - | $ - | |||
| Gross Margin | |||||
| Depreciation and Amortization | - | - | |||
| Operating Income | - | - | |||
| Operating Margin | |||||
| Interest Expense | - | - | |||
| Net Income | $ - | $ - | |||
| Basic EPS | $ - | $ - | |||
| Diluted EPS | $ - | $ - | |||
| Shares used to calculate Diluted EPS | - | - |
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