Question
Investment required (remember to depreciate existing long-term assets at the 2008 amount and ignore the half year rule for 2009 new depreciation - i.e. apply
Investment required (remember to depreciate existing long-term assets at the 2008 amount and ignore the half year rule for 2009 new depreciation - i.e. apply a full year value for depreciation). $600,000 software, expected life 3 years, zero residual value. $1,500,000 warehousing, expected life 10 years $500,000 residual value. 30% additional inventory versus 2008 year-end amount, for the foreseeable future. Sales will increase by 30% versus 2008 and total gross margin in 2009 will be 50% (note - this will include deferred revenues from prior year and deferred revenue in 2009 will be equal to 2008). A/R and A/P will not change vs 2008 (online = immediate payments both ways). SG&A Expenses will increase by 10% versus 2008 in 2009.
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