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Nepean Boards is a small company that manufactures and sells snowboards in Ottawa. Scott Redknapp, the founder of the company, is in charge of the
Nepean Boards is a small company that manufactures and sells snowboards in Ottawa. Scott Redknapp, the founder of the company, is in charge of the design and sale of the snowboards, but he is not from a business background. As a result, the company's financial records are not well maintained. The initial investment in Nepean Boards was provided by Scott and his friends and family. Because the initial investment was relatively small, and the company has made snowboards only for its own store, the investors have not required detailed financial statements from Scott. But thanks to word of mouth among professional boarders, sales have picked up recently, and Scott is considering a major expansion. His plans include opening another snowboard store in Calgary, as well as supplying his "sticks" (boarder lingo for boards) to other sellers. Scott's expansion plans require a significant investment, which he plans to finance with a combination of additional funds from outsiders plus some money borrowed from the banks. Naturally, the new investors and creditors require more organized and detailed financial statements than Scott previously prepared. At the urging of his investors, Scott has hired financial analyst Jennifer Bradshaw to evaluate the performance of the company over the past year. After rooting through old bank statements, sales receipts, tax returns, and other records, Jennifer has assembled the following information: Nepean Boards currently pays out 50% of net income as dividends to Scott and the other original investors, and has a 20% tax rate. You are Jennifer's assistant, and she has asked you to prepare the following: 1. How would you describe Nepean Boards' cash flows for 2018? Write a brief discussion. 2. In light of your discussions in the previous question, what do you think about Scott's expansion plans
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