I need help with my final paper. I'm not exactly sure how to put this together. Any help is greatly appreciated. I attached the financial spreadsheet.

You?ve just been hired onto ABC Company as the corporate controller. ABC Company is a manufacturing firm that specializes in making cedar roofing and siding shingles. The company currently has annual sales of around $1.2 million, a 25% increase from the previous year. The company has an aggressive growth target of reaching $3 million annual sales within the next 3 years. The CEO has been trying to find additional products that can leverage the current ABC employee skillset as well as the manufacturing facilities.

As the controller of ABC Company, the CEO has come to you with a new opportunity that he?s been working on. The CEO would like to use the some of the shingle scrap materials to build cedar dollhouses. While this new product line would add additional raw materials and be more time-intensive to manufacture than the cedar shingles, this new product line will be able to leverage ABC?s existing manufacturing facilities as well as the current staff. Although this product line will require added expenses, it will provide additional revenue and gross profit to help reach the growth targets. The CEO is relying on you to help decide how this project can be afforded. Provide details about the estimated product costs, what is needed to break even on the project, and what level of return this product is expected to provide.

1. Risk Profile
   • Complete An overall risk profile of the company based on current economic and industry issues that it may be facing.
2. Cash Flow Statement
   • You need to complete a cash flow statement for the company using the direct method.
   • Once you?ve completed the cash flow statement, answer the following questions:
     • What does this statement of cash flow tell you about the sources and uses of the company funds?
     • Is there anything ABC Company can do to improve the cash flow?
     • Can this project be financed with current cash flow from the company? Why or why not?
     • If the company needs additional financing beyond what ABC Company can provide internally (either now or sometime throughout the life of the project), how would you suggest the company obtain the additional financing, equity or corporate debt, and why?
3. Product cost
   • ABC Company believes that it has an additional 5,000 machine hours available in the current facility before it would need to expand. ABC Company uses machine hours to allocate the fixed factory overhead, and units sold to allocate the fixed sales expenses. Bases on current research, ABC Company expects that it will take twice as long to produce the expansion product as it currently takes to produce its existing product.
     • What is the product cost for the expansion product under absorption and variable costing?
     • By adding this new expansion product, it helps to absorb the fixed factory and sales expenses. How much cheaper does this expansion make the existing product?
     • Assuming ABC Company wants a 40% gross margin for the new product, what selling price should it set for the expansion product?
     • Assumingthesamesalesmixofthesetwoproducts,whatarethecontributionmarginsandbreak-evenpointsbyproduct?
     1. Potential investments to accelerate profit
        • ABC company has the option to purchase additional equipment that will cost about $42,000, and this new equipment will produce the following savings in factory overhead costs over the next five years:
          • Year 1, $15,000
          • Year 2, $13,000
          • Year 3, $10,000
          • Year 4, $10,000
          • Year 5, $6,000
        • ABC Company uses the net-present-value method to analyze investments and desires a minimum rate of return of 12% on the equipment.
        • What is the net present value of the proposed investment (ignore income taxes and depreciation)?
        • Assuming a 5-year straight-line depreciation, how will this impact the factory?s fixed costs for each of the 5 years (and the implied product costs)? What about cash flow?
          • Considering the cash flow impact of the equipment as well as the time-value of money, would you recommend that ABC Company purchases the equipment? Why or why not?
     2. Conclusion
        • What are the major risk factors that you see in this project?
        • As the controller and a management accountant, what is your responsibility to this project?
        • What do you recommend the CEO do?

ABC Company's current financial information (before/without expansion) Dec. 31,20X2 Dec. 31,20X1 Cash $ 50,000 $ 70,000 Accounts receivable (net) $ 120,000 $ 180,000 Merchandise inventory $ 350,000 $ 280,000 Property plant, & $ 400,000 $ 300,000 equipment Less: Accumulated $ (170,000) $ (100,000) depreciation Total assets $ 750,000 $ 730,000 Accounts payable $ 250,000 $ 210,000 Income taxes payable $ 40,000 $ 10,000 Common stock $ 240,000 $ 240,000 Retained earnings $ 220,000 $ 270,000 Total liabilities & stock, $ 750,000 $ 730,000 equity The firm's accrual-basis income statement revealed the following data: Sales $ 1,200,000 Cost of goods sold $ 800,000 selling and administrative expenses $ 250,000 Depreciation expense $ 70,000 Income taxes $ 30,000 Dividends declared and paid during 20X2 $ 100,000 ABC purchased $100,000 of equipment for cash on August 14, 20X2 (There was no interest expense.) Based on Chapter 5's exercise 5 ABC's Product information Selling Price Units produced and expected to be sold Machine Hours Direct Materials Direct labor dollars needed per product Variable Factory Overhead Variable Selling Expense Total Fixed Costs: Fixed Factory Overhead Fixed Selling expenses Current Product Expansion Product (estimate) $14.50 ? 80,000 40,000 $1.30 per unit $2.80 per unit $1.00 per Machine Hour $0.20 per unit $ $ 198,000 191,250 5,000 5,000 $5.60 per unit $4.00 per unit $1.00 per Machine Hour $0.20 per unit