350000 177000 I- Income statement Revenue cost of goods sold purchases 175000 freight in 2000 gross profit operating expenses sales salaries 80000 35000 15000 SODO 173000 50000 105000 132000 237000 advertising 3000 travel expense 2000 sales commission 2000 depreciation 38000 total of operating expenses operating profit financing cost before tax profit tax expense net profit Balance sheet Assets Current assets Trade receivables cash prepaid expense Inventories total of current assets property plant and equipment of accumulated depreciation total of 2 Lisbilities and shareholders equity accounts payable LTD retirement short term loans total of current liabilities long term liabilities total of liabilities shareholders equity share capital retained caming total of sharcholders equity total of liabilities and shareholders equity 125000 48000 10000 38000 13000 25000 5000 30000 52000 112000 100000 25000 3: 237000 Accounts Sales Salaries Fixed of variable Fixed Variable cost of good Advertising sold Travel variable purchase of raw 175000 material freight in 2000 cost of good sold 177000 Revenge: variable Financing Costs Fixed Freight-in: variable Income Taxes: Variable Sales Com'n Variable Depreciation Fixed 07: Assuming that the price per unit and the variable cost per unit have stayed the same as in calculations for 2021, what is the new BE in units for CompuTech in 2022? How does this compare to the BE in units for the previous year? q8: If the total market in the CompuTech market area had experienced a shrinking in units during the year (of 10%) should the Martins be concerned? Explain. By 2023 the Martins are projecting considerable improvement in their business. Using the following accounts prepare the Income Statement for the period ending December 31, 2022. RM Purchases:$406,000 Sales Salaries: 80,000 Commissions: 5,000 Travel: 5,000 Advertising 10,000 Depreciation: 80,000 Admin Salaries: 60,000 Office Leasing: 10,000 Finance Costs: 30,000 Income Taxes: 42,000 09: in a single EXCEL file complete a file displaying the three Income Statements that you have completed so far. Leave two blank columns between each year so that later we can do account changes between years, Q6: With the following information for 2022 prepare a pro-forma Income Statement for the year ending December 31, 2022, and then, calculate CompuTech's (a) income before taxes, (b) contribution margin and (c) PV ratio. RM Purchases:$ 205,000 Freight in: 4,000 Sales Salaries: 60,000 Commissions: 3,000 Travel: 3,000 Advertising 5,000 Admin Salaries: 38,000 Revenue: 420,000 Depreciation: 40,000 Office leasing 7,000 Finance Costs 14,000 Income Taxes: 13,000 07 Assuming that the price per unit and the variable cost per unit have stayed the same as in calculations for 2021, what is the new BE in units for CompuTech in 20222 How does thic MODULE 7 it is 2022 and CompuTech has decided to expand its business. They have the choice of taking out a competitor in their community and expanding their market presence or they can open a second business which is a franchise opportunity. In the first option the takeover cost would be $300,000 and would result in net cash flow of $60,000 per year beginning in the second year of ownership. No net cash flow is expected in the first year as takeover expenses would offset any proceeds. It is estimated that the business begins acquired could have a residual value of $200,000 in the 10th year. This second option involves franchising at a cost of $75,000 per year with the potential to bring in $100,000 of net profits in each year, beginning in year 2. No proceeds are forecast in year 1. The franchise would run for only 8 years. Q1: If the CompuTech cost of capital is 7% which of the options available to the Martins would you recommend? Remember to do an NPV calculation, a Payback calculation, and an IRR calculation to support your answer. REFLECTION: What learnings have you experienced as you investigated the Martins story? What issues did you recognize as they considered firstly launching the business, and secondly in handling expansion? 350000 177000 I- Income statement Revenue cost of goods sold purchases 175000 freight in 2000 gross profit operating expenses sales salaries 80000 35000 15000 SODO 173000 50000 105000 132000 237000 advertising 3000 travel expense 2000 sales commission 2000 depreciation 38000 total of operating expenses operating profit financing cost before tax profit tax expense net profit Balance sheet Assets Current assets Trade receivables cash prepaid expense Inventories total of current assets property plant and equipment of accumulated depreciation total of 2 Lisbilities and shareholders equity accounts payable LTD retirement short term loans total of current liabilities long term liabilities total of liabilities shareholders equity share capital retained caming total of sharcholders equity total of liabilities and shareholders equity 125000 48000 10000 38000 13000 25000 5000 30000 52000 112000 100000 25000 3: 237000 Accounts Sales Salaries Fixed of variable Fixed Variable cost of good Advertising sold Travel variable purchase of raw 175000 material freight in 2000 cost of good sold 177000 Revenge: variable Financing Costs Fixed Freight-in: variable Income Taxes: Variable Sales Com'n Variable Depreciation Fixed 07: Assuming that the price per unit and the variable cost per unit have stayed the same as in calculations for 2021, what is the new BE in units for CompuTech in 2022? How does this compare to the BE in units for the previous year? q8: If the total market in the CompuTech market area had experienced a shrinking in units during the year (of 10%) should the Martins be concerned? Explain. By 2023 the Martins are projecting considerable improvement in their business. Using the following accounts prepare the Income Statement for the period ending December 31, 2022. RM Purchases:$406,000 Sales Salaries: 80,000 Commissions: 5,000 Travel: 5,000 Advertising 10,000 Depreciation: 80,000 Admin Salaries: 60,000 Office Leasing: 10,000 Finance Costs: 30,000 Income Taxes: 42,000 09: in a single EXCEL file complete a file displaying the three Income Statements that you have completed so far. Leave two blank columns between each year so that later we can do account changes between years, Q6: With the following information for 2022 prepare a pro-forma Income Statement for the year ending December 31, 2022, and then, calculate CompuTech's (a) income before taxes, (b) contribution margin and (c) PV ratio. RM Purchases:$ 205,000 Freight in: 4,000 Sales Salaries: 60,000 Commissions: 3,000 Travel: 3,000 Advertising 5,000 Admin Salaries: 38,000 Revenue: 420,000 Depreciation: 40,000 Office leasing 7,000 Finance Costs 14,000 Income Taxes: 13,000 07 Assuming that the price per unit and the variable cost per unit have stayed the same as in calculations for 2021, what is the new BE in units for CompuTech in 20222 How does thic MODULE 7 it is 2022 and CompuTech has decided to expand its business. They have the choice of taking out a competitor in their community and expanding their market presence or they can open a second business which is a franchise opportunity. In the first option the takeover cost would be $300,000 and would result in net cash flow of $60,000 per year beginning in the second year of ownership. No net cash flow is expected in the first year as takeover expenses would offset any proceeds. It is estimated that the business begins acquired could have a residual value of $200,000 in the 10th year. This second option involves franchising at a cost of $75,000 per year with the potential to bring in $100,000 of net profits in each year, beginning in year 2. No proceeds are forecast in year 1. The franchise would run for only 8 years. Q1: If the CompuTech cost of capital is 7% which of the options available to the Martins would you recommend? Remember to do an NPV calculation, a Payback calculation, and an IRR calculation to support your answer. REFLECTION: What learnings have you experienced as you investigated the Martins story? What issues did you recognize as they considered firstly launching the business, and secondly in handling expansion