If it is possible, could I please get help with answering all of the second #6 (a,b, c, and d) please? Thank you!

2. Based on tentative agreement and orders, it is expected that cost of goods sold will average about 65% of sales General and administrative expenses are expected to be $80,000 in 2019, $140,000 in 2020, $160,000 in 2021 3. and level off at $180,000 from 2022 on. The land lease expenses and interest expenses are included in operational expenses. 4. Selling expenses are expected to be about 10 percent of sales and Sue is expecting to undertake extensive marketing and promotion efforts throughout Texas after the business is opened. It is expected that these additional promotional expenses will be about $80,000 in 2019 only 5. The company will use ten-year straight-line depreciation of the building and improvements. 6. New Mexico's effective tax rate is 25 percent. 7. Since they expect a good deal of business to be paid by credit card and to ship goods to Texas on credit, they expect to carry about 45 days of accounts receivables. They also expect that, based on the type of business they are entering, they will turn their inventory over about two and half times a year Based on the negotiations they have had with their craftspeople, suppliers, and other wholesale distributors, they 8. estimate that they can count on about 35 days of accounts payable to help finance the business. In preparing to go to the bank for the necessary loan, the Mahons want to prepare projected financial statements showing that New Mexico Trading Company can make a profit and pay back the loan. They also want to know more precisely how much they will need to borrow from the bank to open the doors for business. The Mahons plan to prepare five years of balance sheet, income statement, and cash budget data for the bank. They must also develop an opening balance sheet as of the day they plan to open the doors, July 1, 2019. These pro forma financial statements will aid them, and the banlk officer, in answering many questions including: 1. How much financing will be needed to open the doors of the business in July 2019? 2. Five full years (including 2024) of pro forma balance sheet and income statement data must be prepared to determine if additional financing is needed, and if so, how much. Steven's finance background tells him that the estimated financing needed each year will be an accounting plug figure to ensure that the balance sheet balances. If projected assets exceed liabilities and equity, the difference will be the bank's borrowing needs. If liabilities and equity exceed projected assets purchases, these funds will be used to pay off debt or increase cash or marketable securities. 3. Because this is a start-up business it is even more important to identity the following: what the loan proceeds will be used for a. b. what the primary source o f repayment and what is the secondary source of repayment when the total loan proceeds will be repaid (using the pro forma projections, the primary source of c. repayment and when the loan will be repaid can be determined) 4. A cash budget or cash-based income statement needs to be pre pared because Steven knows the only thing that matters to the bank is cash. s to prepare a collateral schedule. He knows that the banker does not want the collateral, but 5. Finally, Steven needs will need all he can get if the business is not as successful as expected 6. Be sure to explain the specifics of the questions below as they relate to this case. What types of loan covenants would you require? a. b. Identify the bank's largest risks in making this loan How would you structure the loan to protect the bank if you approve the loan (what term, line or loan, c. etc.)? d. What is your recommendation concerning the loan request (approve/deny)? Provide your reasoning 2. Based on tentative agreement and orders, it is expected that cost of goods sold will average about 65% of sales General and administrative expenses are expected to be $80,000 in 2019, $140,000 in 2020, $160,000 in 2021 3. and level off at $180,000 from 2022 on. The land lease expenses and interest expenses are included in operational expenses. 4. Selling expenses are expected to be about 10 percent of sales and Sue is expecting to undertake extensive marketing and promotion efforts throughout Texas after the business is opened. It is expected that these additional promotional expenses will be about $80,000 in 2019 only 5. The company will use ten-year straight-line depreciation of the building and improvements. 6. New Mexico's effective tax rate is 25 percent. 7. Since they expect a good deal of business to be paid by credit card and to ship goods to Texas on credit, they expect to carry about 45 days of accounts receivables. They also expect that, based on the type of business they are entering, they will turn their inventory over about two and half times a year Based on the negotiations they have had with their craftspeople, suppliers, and other wholesale distributors, they 8. estimate that they can count on about 35 days of accounts payable to help finance the business. In preparing to go to the bank for the necessary loan, the Mahons want to prepare projected financial statements showing that New Mexico Trading Company can make a profit and pay back the loan. They also want to know more precisely how much they will need to borrow from the bank to open the doors for business. The Mahons plan to prepare five years of balance sheet, income statement, and cash budget data for the bank. They must also develop an opening balance sheet as of the day they plan to open the doors, July 1, 2019. These pro forma financial statements will aid them, and the banlk officer, in answering many questions including: 1. How much financing will be needed to open the doors of the business in July 2019? 2. Five full years (including 2024) of pro forma balance sheet and income statement data must be prepared to determine if additional financing is needed, and if so, how much. Steven's finance background tells him that the estimated financing needed each year will be an accounting plug figure to ensure that the balance sheet balances. If projected assets exceed liabilities and equity, the difference will be the bank's borrowing needs. If liabilities and equity exceed projected assets purchases, these funds will be used to pay off debt or increase cash or marketable securities. 3. Because this is a start-up business it is even more important to identity the following: what the loan proceeds will be used for a. b. what the primary source o f repayment and what is the secondary source of repayment when the total loan proceeds will be repaid (using the pro forma projections, the primary source of c. repayment and when the loan will be repaid can be determined) 4. A cash budget or cash-based income statement needs to be pre pared because Steven knows the only thing that matters to the bank is cash. s to prepare a collateral schedule. He knows that the banker does not want the collateral, but 5. Finally, Steven needs will need all he can get if the business is not as successful as expected 6. Be sure to explain the specifics of the questions below as they relate to this case. What types of loan covenants would you require? a. b. Identify the bank's largest risks in making this loan How would you structure the loan to protect the bank if you approve the loan (what term, line or loan, c. etc.)? d. What is your recommendation concerning the loan request (approve/deny)? Provide your reasoning