Question 1:

Current year

Year 1

Year 2

Year 3

Year 4

Year 5

Market volume unit

75000000

77250000

79567500

81954525

84413160.75

86945555.57

Price

5$

5.1

5.202

5.31

5.41

5.52

Revenue

375000000

393975000

413910135

435178527.8

456675199.7

479939466.7

Question 2:

Current year

Year 1

Year 2

Year 3

Year 4

Year 5

Sales and Cash collection

0

374276250

412913378.3

434115108.2

455600366.1

478776253.4

Question 3:

Current year

Year 1

Year 2

Year 3

Year 4

Year 5

Cost of good sold

281190000

295991100

310607649.8

325834800.5

Inventory

1000000

454204716.1

501160402.7

526653878.7

Purchase

282190000

703395234.5

805610829

848416616,5

Question 4:

Current year

Year 1

Year 2

Year 3

Year 4

Wage

0

34308656.25

40969361.76

43234829.74

45380992.79

Task 5: Estimate a Cash Budget Estimate a cash budget for four years, based on the above assumptions and the following additional assumptions: Selling and Administrative Expenses, including rent is estimated to be 10% of Sales and is paid in the year in which it occurs. The business requires capital expenditure of $500,000 a year in each of the first two years, which is also paid in the year it is incurred. Assume Cash at the beginning of the First Year is equal to a minimum amount you want to retain at the end of each year in cash to cover contingencies, being $50,000. Interest Expense on Debt is at a rate of 15% per annum and is estimated based on the Loan Balance estimated at the end of the prior year. Assume an external investor invests $2,000,000 in the First Year.