My company, which holds a patent valued at $200,000 for prefabricated panels made from local and recycled materials, has submitted a successful proposal to government for the design, finance, construction and marketing of housing units at various state-owned sites throughout the country, under a public private partnership (PPP) agreement whereby the government will provide the land free of charge. On this basis your company will prepare a business plan and negotiate a (long-term) loan of $500,000.

After execution of the PPP agreement you will have 6 months to complete the design of the units and It will take a further 4 months to finish the assembly drawings for the prefabricated wall and roof panels. During this period, the factory, plant and equipment will be installed. Materials for prefabricating the panels will be ordered once the drawings are completed and prefabrication will commence one month later, at which time work on preparing the sites will also commence (start of construction).

Projected revenues for the first 3 years are $6 million, $12 million, and $14 million respectively. The plant and equipment for the project, which will cost $600,000, will be depreciated on a straight-line basis over 10 years with no salvage value.

Your company will maintain a cash float of $110,000 in the first year. Common stock of $410,600 will be issued in the first year and no more shares will be issued in the next 2 years. An investment of $165,000 with a major supplier will also be made in the first year.

Income tax expense will be 25 (%) percent (of earnings before tax) and a dividend of 20 (20%) percent (of earnings after tax) will be paid to shareholders.

Other projected financial data at the end of the first three (3) years of the project are:

2021 2022 2023

Interest Expense $3,500 $2,800 $2,200

Accounts Receivable $47,500 $67,500 $115,000

Inventory $50,000 $70,000 $130,000

Accounts Payable $60,000 $90,000 $140,000

Cost of Goods Sold $3,900,000 $9,690,000 $11,000,000

Overhead Expenses $1,800,000 $2,000,000 $2,500,000

Design a projected end of year Balance Sheets, Income (Profit and Loss) Statements for three years and Cash Flow Statements (for the last two years).