$f_x$ SHARES: Issued $26,000$$$1-$par shares to the sharks for a $25\%$ owners

B

D

E

F

G

J

RENT EXPENSE: Rent expense is a fixed cost in the amount of $$15,000$ per year in $2020-2022,$ increasing to $$200,000$ per year in $2023.$

DEPRECIATION EXPENSE: Depreciation expense is a fixed cost in the amount of $10\%$ of Plant & Equipment each year.

INTEREST EXPENSE: This is a Fixed cost, and is $10\%$ of Long$-$term Liabilities.

TAXES: Because you live in a business$-$friendly State $($Wyoming$),$ you don't have to pay state taxes on your LLC$\text{'}$s income. You do$,$ however, still have to pay Federal taxes. Also, in $2022,$ higher tax rates were passed for the $2023$ tax year, pushing income over $$400,000$ into the $39\mathrm{.}6\%$ tax bracket. Because of this, use $36\%$ as your effective tax rate. $($NOTE: If the taxes shown for $2020-2022$ seem high, it's because you had income from another job that threw your $($LC income into a slightly higher tax bracket. However, you'll quit that job IF the sharks fund youl$)$

$\backslash$table$[[$SHARES: Issued $26,000$$$1-$ par shares to the sharks for a $25\%$ ownership stake.$],[$CASH: Increases to $$50,000$ in $2023$ and stays at that level.$],[$MARKETABLE SECURITIES: Plan to keep Marketable Securities at $60\%$ of Cash levels.$],[$ACCOUNTS RECEIVABLE: Un$]]$

ACCOUNTS RECEIVABLE: Use a $3-$year average Receivables Turnover ratio to forecast. $($HINT: Find the formula for

Receivables Turnover $($RTO$)$ in your Week $2$ Chapter readings, and solve for RTO for each of $2020,2021,$ and $2022.$

Average the $3$ results together. Plug your Average RTO into the RTO formula for each future year, along with your other known number from your financial statements, to find your forecasted Accounts Receivable amounts. This is demonstrated in your Week $2$ Lesson!$)$

INVENTORY: Compute a $3-$year average of inventory as a Percent$-$of$-$Sales, and then use that figure to forecast inventory levels through $2027.$

PLANT & EQUIPMENT: There is a new capital expenditure of $$750,000$ dollars in $2023,$ paid for from the $$1M$ in funding from the sharks, rather than with new debt. $($All capital expenditures are assumed to occur on January $1$ st of the year of purchase, and no equipment is sold or salvaged during the forecasted period.$)$

ACCUMULATED DEPRECIATION: Each year, $10\%$ of the total amount of Plant and Equipment is added to the depreciation amount.

ACCOUNTS PAYABLE: Use the $3-$year average Current Ratio to forecast. $($HINT: The Current Ratio will help you forecast TOTAL Current Liabilities, not Accounts Payable. Find Total Current Liabilities and Accrued Expensesfirst, and then you can solve for Accounts Payable.$)$

ACCRUED EXPENSES: Use the $3-$year average Percent$-$of$-$Sales method to forecast.

LONG$-$TERM LIABILITIES: Pay down $$100,000$ of old debt every year starting in $2023.$

COMMON STOCK $($$$1$ Par$)$: Increase by the dollar value of shares issued to sharks $(26,000$ shares at $$1$ par$).$

CAPITAL PAID IN EXCESS OF PAR: The shark's full investment of $$1M$ must be reflected on the Balance Sheet. The stock received by the shark, worth $$26,000($at Par value of $$1$ per share$),$ is al ready reflected under Common Stock.

Scenario & Requirements

Asqumptions

Forecasted Financials

Milestone $2N$