A. Prepare a statement of cash flows for 2018 for the SoCal Tech.

B. Provide a brief description of what happened in terms of cash flows (both inflows and outflows) for the firm between years 2017 and 2018.

C. Use your calculations from Part A for cash flows from operating and investing activities to indicate the extent to which the firm was building or burning cash in 2018.

D. Convert the 2018 annual cash build or cash burn to a monthly rate. If cash flow activities relating to operations and investing for 2018 continue into 2017, indicate how long it will be before SoCal Tech runs out of cash. Assume no changes in cash flows from financing activities in 2017 for calculation purposes.

E. For year 2018, the firms cost of goods sold is considered to be variable costs and operating expenses are considered to be fixed cash costs. Depreciation expenses are expected to be fixed costs. Calculate EBDAT breakeven in terms of survival revenues for year 2018.

F. Assume year 2017 will be a replication of year 2018 except that cost of goods sold are expected to be 65 percent of the estimated $450,000 in revenues. Calculate the EBDAT breakeven point for 2017 in terms of survival revenues.

Income Statements in $ Thousands) 2017 Net sales $375 Less: Cost of goods sold 225 Gross profit 150 Less: Operating expenses 46 Less: Depreciation 25 Less: Interest 4 Income before taxes 75 Less: Income taxes 20 Net income 55 Cash dividends $17 2018 $450 270 180 46 30 4 100 30 70 $20 Balance Sheets, 12/31(in $Thousands) 2017 Cash $ 39 Accounts receivable 50 Inventories 151 Total current assets 240 Gross fixed assets 200 Less accumulated depreciation -95 Net fixed assets 105 Total assets $345 2018 $ 16 80 204 300 290 -125 165 $465 Accounts payable Bank loan Accrued liabilities Total current liabilities Long-term debt $ 30 20 10 60 15 $ 45 27 23 95 15 Common stock Retained earnings Total liabilities and equity 85 185 $345 120 235 $465 Income Statements in $ Thousands) 2017 Net sales $375 Less: Cost of goods sold 225 Gross profit 150 Less: Operating expenses 46 Less: Depreciation 25 Less: Interest 4 Income before taxes 75 Less: Income taxes 20 Net income 55 Cash dividends $17 2018 $450 270 180 46 30 4 100 30 70 $20 Balance Sheets, 12/31(in $Thousands) 2017 Cash $ 39 Accounts receivable 50 Inventories 151 Total current assets 240 Gross fixed assets 200 Less accumulated depreciation -95 Net fixed assets 105 Total assets $345 2018 $ 16 80 204 300 290 -125 165 $465 Accounts payable Bank loan Accrued liabilities Total current liabilities Long-term debt $ 30 20 10 60 15 $ 45 27 23 95 15 Common stock Retained earnings Total liabilities and equity 85 185 $345 120 235 $465