Task 4: Estimate a projected four-year Income Statement, based on the above assumptions and the following additional assumptions: Depreciation is estimated as being equal to 10% of Gross Fixed Assets at the end of the prior year. Interest Expense on Debt is at a rate of 15% per annum and is estimated based on the Debt Balance and Additional Funds Needed (if any) estimated at the end of the prior year. Tax is estimated as being expensed at 30% of Earnings before Tax. Assume that any tax benefits are NOT carried forward to reduce future tax payable. Assume NO dividends are declared.

Task 5: Estimate a projected four-year Balance Sheet, based on the above assumptions and the following additional assumptions: The Balance Sheet at the end of the year prior to First Year was comprised as follows: Cash $50,000; Inventories $1,000,000; Gross Fixed Assets $4,000,000; Debt $2,000,000 and Owners Equity $3,050,000. You should assume all other prior period Balance Sheet values were zero. Required cash is estimated to be 1% of Sales. The business requires capital expenditure of $500,000 a year in each of the first two years. Assume the founder invests additional $2,000,000 in the first year.

Task 6: Estimate a projected four-year Cash Flow Statement, based on the above assumptions.