Background: Andrew intends to start his own Automobile Service business after he graduates from ODU in the fall. As part of a Business plan for the startup he needs to draft a financial plan. Based on his initial research he has documented the following information: Services: Auto service offerings in his area may be categorized under 3 options depending on the job type and cost: Basic service $19.99, Standard $49.99, Premium package $109.99 Projected sales: For the first year of operation he expects to have 18 customers a week for a 50 week annual schedule. Of these 10 are likely to opt for the Basic package and 5 and 3 for the standard and premium packages respectively. He expects to grow this customer base by 20% each year for the first 5years. (Assume growth is uniform across service types) Variable Costs: Material and labor costs for a service job are typically 50% of the sale price Fixed Costs: The monthly rent and utilities for a warehouse and office space is around $1,500.00. Annual insurance cost is estimated at $4000.00 Initial costs: Lift with installation-$4000, Tools-$15,000, Diagnostic machine-$5000. Depreciable under MACRS 5yr schedule (20, 32, 19.2, 11.52, 11.52, 5.76). Registration and licensing costs - $3000 Capitalization: For startup he expects to take a loan of $75,000 with a 10year payment term Interest & Taxes: Cost of Borrowing- 6%, MARR 10%, Use an effective tax rate of 15%, Time convention: Assume initial investments happen in 2017 (year 0), first year of operation is 2018 REQUIREMENTS 1. Develop 5 year financial projections for Andrews business plan, this should include a. A sales forecast & budget for the business b. Pro-forma Income and Cash flow statements 2. Considering initial startup capital estimate: a. Payback period b. NPW and IRR values for the 5year analysis period 3. Discuss any assumptions/simplifications in your analysis 4. Assuming alternatively Andrew can take up employment in an engineering firm with an annual salary of $65,000 for the next 5years. Which option would be a better alternative financially?

please help with thos project