Using the PowerPoint Lecture Creating Projections, create a new set of projections for Years XE and X+1E. For this Homework Assignment, your work should be completed on the Week 7 Homework Worksheet (attached to this file). This is an Excel file. 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 XE 30% Year X+1E 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 XE. Same level in Year X+1E. 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.

Use this set of assumptions for Year XE and X+1E: Revenue growth 30% Year X-1 to XK, and 30% Year XK to X+1K 1% improvement in Gruss Margin for Year XK (frum year X-1). No further change in the Gross Margin for Year X+1. 1% impurtreement in Selling in Year XK. Same level in Year X+1K. G&A remains constant on a common size basis. $10,000 increase in R&D in XK. Same R&D level in Year X+1K. 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 Xi and X+1K 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 in vacions members of management with an exercise price of $1.00. These options are granted on the first day of Year XK. There are no other options, warrants or convertible securities. The average stock price for Year XK and Year X+1K is projected to be $5.00. All other interest payments, interest income and tax rates remain the Your Name Here Revenue Cost of Goods Sold Grass Profit Seling General and Administrative Research and Development Depreciation and Amortization Total Operating Expenses Operating Income Interest costs Interest income Pre-Tax Income Tax (35%) Net Income Earnings Per Share - Basic Hamnings Per Share - Diluted Shares Outstanding Shares For Diluted A Options Fix Price Stock Price Proceeds New Share structure Buy Back Shares Shares for Diluted Calculations $ $ $ $ $ Year X-1 1,440,000 100.0% 921,600 64.0% 518,400 36.0% 158,400 11.0% 108,000 7.5% 40,000 2.8% 30,000 2.1% 336,400 23.4% 182,000 12.6% 5,000 0.3% 4,000 0.3% 181,000 12.6% 63,350 117,650 8.2% 0.04 3,000,000 500,000 1.00 5.00 500,000 3,500,000 100,000 3,400,000 Year XE Year X+1 E Use this set of assumptions for Year XE and X+1E: Revenue growth 30% Year X-1 to XK, and 30% Year XK to X+1K 1% improvement in Gruss Margin for Year XK (frum year X-1). No further change in the Gross Margin for Year X+1. 1% impurtreement in Selling in Year XK. Same level in Year X+1K. G&A remains constant on a common size basis. $10,000 increase in R&D in XK. Same R&D level in Year X+1K. 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 Xi and X+1K 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 in vacions members of management with an exercise price of $1.00. These options are granted on the first day of Year XK. There are no other options, warrants or convertible securities. The average stock price for Year XK and Year X+1K is projected to be $5.00. All other interest payments, interest income and tax rates remain the Your Name Here Revenue Cost of Goods Sold Grass Profit Seling General and Administrative Research and Development Depreciation and Amortization Total Operating Expenses Operating Income Interest costs Interest income Pre-Tax Income Tax (35%) Net Income Earnings Per Share - Basic Hamnings Per Share - Diluted Shares Outstanding Shares For Diluted A Options Fix Price Stock Price Proceeds New Share structure Buy Back Shares Shares for Diluted Calculations $ $ $ $ $ Year X-1 1,440,000 100.0% 921,600 64.0% 518,400 36.0% 158,400 11.0% 108,000 7.5% 40,000 2.8% 30,000 2.1% 336,400 23.4% 182,000 12.6% 5,000 0.3% 4,000 0.3% 181,000 12.6% 63,350 117,650 8.2% 0.04 3,000,000 500,000 1.00 5.00 500,000 3,500,000 100,000 3,400,000 Year XE Year X+1 E