Need help with the calculations and the proposed changes and the potential impact on the company?s cash, taxes, overall profitability, and the future success of the company.

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SILVER CLOUD COMPUTING Case Study Silver Cloud Computing is a new company that provides cloud computing services. The company will begin operations on April 1, 2017. It acquired financing from the issuance of common stock for $75,000,000 and long-term debt for $50,000,000. The following projected income statement and balance sheet were prepared by the external accountant prior to the start of operations. All amounts are in thousands. Silver Cloud Computing Projected Income Statement First Year of Operations (in thousands) Sales Expenses: Wages and salaries (includes CEO salary of $1,000) Bad debt expense Depreciation Marketing Expense Occupancy Expense Research and Development (includes R&D salaries & wages and other R&D expenditures) Total Expenses Operating income before bonus Bonus Operating income Interest expense Income before taxes Income taxes (40%) Net income $400,000 $125,000 5,000 40,000 50,000 95,500 80,000 395,500 4,500 225 4,275 2,500 1,775 710 $ 1,065 Silver Cloud Computing Projected Balance Sheet March 31, 2018 (in thousands) Assets: Cash Accounts receivable, net of allowance of 5,000 Net computer equipment Total assets Liabilities & Shareholders' Equity: Accounts payable Long-term debt Common stock Retained earnings Total liabilities and shareholders' equity $ 5,930 45,000 80,000 $130,930 $ 4,865 50,000 75,000 1,065 $130,930 A Chief Executive Officer (CEO) was hired just prior to the commencement of operations. After examining the projections for the first year, the CEO presented the following suggestions to the chief financial officer (CFO). 1. Decrease research and development expenditures from 20% of sales to 10% of sales. 2. Increase the estimated lives of the computer equipment from 3 years to 6 years. 3. Reduce the allowance for doubtful accounts from 10% of accounts receivable to 5% of accounts receivable. 4. Decrease marketing expense from 12.5% of sales to 8% of sales. Additional notes: The CEO's compensation package at Silver Cloud Computing is a $1,000,000 salary with a cash bonus of 5% of operating income before the bonus. Original depreciation of the computers was calculated using straight-line depreciation over a 3 year period with no salvage value. Required: You have been requested by the CFO to prepare a power point presentation for the next board of directors meeting that addresses the proposed changes made by the CEO. Prepare a 15 to 20 slides power point presentation that addresses the proposed changes and the potential impact on the company's cash, taxes, overall profitability, and the future success of the company. Also address any ethical issues that may result from the proposed changes. Provide a minimum of three references. Note that citations should be provided on slides and a separate slide should be provided at the end of the presentation with the reference list. The notes section of the slide should be used to provide speaking points and show calculations