Appendix 1: Include a projected cash-flow statement for years one through three. Search the internet and industry websites for approximate revenues / expenses. Show beginning / ending cash balances for each of the first three years starting with $1 million start-up capital. Include additional appendices if warranted.

YEAR 1 YEAR 2 YEAR 3

Starting Cash$1,000,000$ 930,000$ 955,000

Gross Revenues$ 400,000$ 450,000$ 550,000

Less Cost of Goods Sold$ 200,000$ 225,000$ 275,000

Operating Profit$ 200,000$ 225,000$ 275,000

Less Fixed Costs:

Wages$ 100,000$ 100,000$ 125,000

Leaseholds/Equipment$ 75,000$ 10,000$ 10,000

Rent$ 60,000$ 60,000$ 60,000

Line-of-Credit/Interest$ 0$ 0$ 0

Fees & Insurance$ 5,000$ 5,000$ 5,000

Promotion$ 30,000$ 25,000$ 25,000

Total Fixed Costs$ 270,000$ 200,000$ 225,000

Net Profit (Loss)($ 70,000)$ 25,000$ 50,000

Interest (e.g. $500k x2%)$ 10,000$ 10,000$ 10,000

Ending Cash$ 940,000$ 965,000$1,015,000

Interest Income is an optional income stream if assets are not otherwise being fully utilized.

For purposes of this exercise disregard corporate income tax and asset depreciation.

Assume investors will retain all funds in the company for the first three years.