Complete answers and a detailed cash flow statement as depicted in exhibit 14-1 are required.

1. List and describe your monthly fixed costs and add a cash reserve that covers three months of fixed costs.
2. Create a projected cash flow statement for your business for the first four quarters and the second and third years of operation.
3. Calculate the burn rate for your business.

CHAPTER Exhibit 14-1 Sample Cash Flow Statement Cash Flow Statement for Lola's Custom Draperies Inc. for the Month of March 2014 Cash Flow from Operations Cash Inflows $65,400 $65,400 Sales (Net of Returns) Total Cash Inflows Cash Outflows: Variable Costs COGS (S29,360 (6,540) (88,000) (12,000) (1,000) (2,875) ($59,775) $5,625 ($11,500 X 0.25 (565,400 - $59,775) Other VC (Sales Commissions) Fixed Costs Factory Rent & Utilities Sales & Administrative Part-Time Tech-Support Salary Taxes Total Cash Outflow in Operating Activities Net Cash Flow from Operations Cash Outflow from Investing Purchase of Building Purchase of Equipment Net Cash Flow from Investing Cash Flow from Financing: Loans Gifts Equity Investment Net Cash Flow from Financing Net Increase/Decrease) in Cash Cash, Beginning (6,000) ($6,000 $25,000 0 (S5,625 - 58,000 + S25 $25,000 S24,625 $500 $25,125 (5500 + 524,525) Cash, Ending CHAPTER Exhibit 14-1 Sample Cash Flow Statement Cash Flow Statement for Lola's Custom Draperies Inc. for the Month of March 2014 Cash Flow from Operations Cash Inflows $65,400 $65,400 Sales (Net of Returns) Total Cash Inflows Cash Outflows: Variable Costs COGS (S29,360 (6,540) (88,000) (12,000) (1,000) (2,875) ($59,775) $5,625 ($11,500 X 0.25 (565,400 - $59,775) Other VC (Sales Commissions) Fixed Costs Factory Rent & Utilities Sales & Administrative Part-Time Tech-Support Salary Taxes Total Cash Outflow in Operating Activities Net Cash Flow from Operations Cash Outflow from Investing Purchase of Building Purchase of Equipment Net Cash Flow from Investing Cash Flow from Financing: Loans Gifts Equity Investment Net Cash Flow from Financing Net Increase/Decrease) in Cash Cash, Beginning (6,000) ($6,000 $25,000 0 (S5,625 - 58,000 + S25 $25,000 S24,625 $500 $25,125 (5500 + 524,525) Cash, Ending