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Start-up Capital Requirements

Equipment (oven, trays, mixers) $4350

Raw materials (per month) $45-650

Packaging (per month) $50-200

Health Permits $1200

Overall Attractiveness of the Investment

Annual Unit Sales: 2600 boxes

Price Per Unit: 1 box = $15 for 24 cookies. $0.62 per cookie

Variable Cost per unit (production and sales) : .085 per cookie

Fixed Costs (admin, production, and sales): 300

One-Time Startup Costs (Equipment, mktg, legal, etc.): $5550

Working Capital: (receivables, inventory, ect.): 150

Annual Growth and Income

G. Estimated annual income (AXB): $39,000

H. Estimated annual variable costs (AXC): $221

Estimated annual contribution margin (G-H-D): $38,479

Calculate Break-even figures

J. Contribution margin per unit (B-C): $0.535

K. Annual break-even quantity (D/J): 560.75

L. Ration of Break Even to expected quantities (K/A): 0.22

Estimated Startup Costs

M. Total up-front funds required (E+F): $5,600

N. Additional Units to cover up-front funds (M/J): 10467.29

O. Break-even quantity with up-front funds (K+N): $11,028.04

Financial Performance Figures

P. Payback period for startup funds (M/I): .146

Q. Annual Return on Startup Investment (I/M): 6.87

R. Variable Costs to price ratio (C/B): .137

S. Contribution Margin Ratio (I/G): .987

To conclude this section, you need to summarize what you learned from your assessment of start-up capital requirements and overall attractiveness of the investment, and rank financial feasibility using a 1-5 scale. You need to justify the number you selected on the 1-5 scale, and note concerns in the area financial feasibility analysis to guard against and/or try to overcome. Describe the most important areas you noted and how you plan to address them.