Josephine has been through several start up situations and has the time, wealth and connections to do another one. She is now planning the next startup that looks very promising with sales expected to double every year. Following is the information that has been collected and the expected income statement. The investments, depreciation and book value results are provided below and are to be used as they are presented.
Help Josephine with her 5-year plan by preparing a cash flow statement and determine the present worth and future worth of this proposal.
	Expected Sale Price in year 5	$125,000,000
	Income Tax rate	20%
	Capital Gains Tax rate	12%
	MARR	20%
	Year	0	1	2	3	4	5
	Annual Investment	$5,000,000	$10,000,000	$20,000,000	$30,000,000	$30,000,000	$0
	Annual Depreciation		$1,000,000	$5,200,000	$11,040,000	$17,776,000	$24,048,000
	Book Value	$5,000,000	$14,000,000	$28,800,000	$47,760,000	$59,984,000	$35,936,000
Working Capital		0	1	2	3	4	5
	Accounts Receivable	$0	$250,000	$400,000	$550,000	$700,000	$850,000
	Inventory	$10,000	$100,000	$150,000	$200,000	$250,000	$300,000
	Accounts Payable	$20,000	$180,000	$180,000	$180,000	$180,000	$180,000
	Wages Payable	$5,000	$50,000	$65,000	$80,000	$95,000	$110,000
Income Statement		0	1	2	3	4	5
	Revenue		$3,000,000	$6,000,000	$12,000,000	$24,000,000	$48,000,000
	COGS		($900,000)	($1,800,000)	($3,600,000)	($7,200,000)	($14,400,000)
	Gross Margin		$2,100,000	$4,200,000	$8,400,000	$16,800,000	$33,600,000
	SG&A		($180,000)	($315,000)	($551,250)	($964,688)	($1,688,203)
	Depreciation		($1,000,000)	($5,200,000)	($11,040,000)	($17,776,000)	($24,048,000)
	EBIT		$920,000	($1,315,000)	($3,191,250)	($1,940,688)	$7,863,797
	Tax		($184,000)	$263,000	$638,250	$388,138	($1,572,759)
	Net Income		$736,000	($1,052,000)	($2,553,000)	($1,552,550)	$6,291,038