Gen Z company is a start-up that plans to sell fashionable t-shirts, hoodies, and

bombers targeting the teenagers and young generation. They plan to order their

inventory from China and resell in Kazakhstan. The prices and costs (including

shipment) for each category of products are given below.

The company will sell its products online and through boutiques in the popular

malls in the city. The average number of sales online and per each boutique per

day is provided below (assume 365 days in a year). Online Sales will increase by

20% each year starting from year 2 (round the number to the whole number, you

can use the =round() function in Excel).

The following is the monthly salaries of employees:

The number of employees by years:

The number of salespersons corresponds to the number of boutiques.

Gen Z expects to buy the following fixed assets for their operations. Costs and

quantities to be purchased per year are provided below.

Quantity of Fixed assets:

The company forecasts the following additional monthly expenses:

Rent expenses are shown per boutique basis and will depend on the number of

boutiques each year. Advertising expenses will increase by 20% each year, while

other expenses will increase by 10% each year starting from year 2.

Assume that the company will operate under Sole Proprietorship Common Rules

(ignore the tax exemption for small businesses).

Prepare a financial model in Excel forecasting Gen Zs cash flows and calculate

the value (NPV) of the business if the cost of capital is 25%. Cash flows are

expected to grow at 2% forever after year 5. The annual NWC requirement is 10%

of Sales to be invested one year ahead (Year 5 investment should be 0). Ignore

the inflation.

Item T-shirt Hoodie Bomber Price in KZT Cost in KZT 5,000 3,000 10,000 6,000 12,000 8,000 Boutiques Online 71 10 T-shirt Hoodie Bomber 4 7 3 5 Salary in KZT 500,000 200,000 Position Top management Accountant Marketing and PR Specialist Salesperson 200,000 150,000 Year 1 Year 4 Year 2 3. Year 3 3 4 Year 5 5 3 6 1 1 2 Item Top management Accountant Marketing & PR specialist Salesperson 1 1 2 4 2. 2 4 6 Fixed assets 5 Computer Printer Useful life in Cost in KZT years 400,000 200,000 500,000 400,000 5 Office Furniture set 10 Steam iron 10 Year 1 Year 2 Year 4 3 Fixed assets Computer Printer Office Furniture set Steam iron NUUU 5 5 5. 2 Year 3 0 0 3 ||||| colololol Year 5 3 3 3 5 3 3 3 5 3 5 Ww Expense KZT (per month) Rent Advertising Other 500,000 200,000 200,000 Item T-shirt Hoodie Bomber Price in KZT Cost in KZT 5,000 3,000 10,000 6,000 12,000 8,000 Boutiques Online 71 10 T-shirt Hoodie Bomber 4 7 3 5 Salary in KZT 500,000 200,000 Position Top management Accountant Marketing and PR Specialist Salesperson 200,000 150,000 Year 1 Year 4 Year 2 3. Year 3 3 4 Year 5 5 3 6 1 1 2 Item Top management Accountant Marketing & PR specialist Salesperson 1 1 2 4 2. 2 4 6 Fixed assets 5 Computer Printer Useful life in Cost in KZT years 400,000 200,000 500,000 400,000 5 Office Furniture set 10 Steam iron 10 Year 1 Year 2 Year 4 3 Fixed assets Computer Printer Office Furniture set Steam iron NUUU 5 5 5. 2 Year 3 0 0 3 ||||| colololol Year 5 3 3 3 5 3 3 3 5 3 5 Ww Expense KZT (per month) Rent Advertising Other 500,000 200,000 200,000