DSS

a$)20$ marks

You are getting into a business and want to take a loan. The bank requires that you show them your projected profits. Develop calculate a forecast for the next five years starting $2024$ the following data:

First order is for $100,000$ units at a selling price of $6$kshs per unit. Both numbers are projected to increase by $20\%$ yearly

Renting the production facility at $500,000$kshs a year for five years

Variable manufacturing cost of $1\mathrm{.}50$kshs per unit with a projected increase of $10\%$ yearly

Administration cost of $25,000$kshs per year with a likely increase of $5\%$annually

Tax rate is at $36\%$

a$)$ Develop a five year financial forecast showing profits before and after tax.

b$)$ Determine If the Loan should be given based on the forecast.