Project Name: Expansion Project Cost of Project: 5 487,734 Cash Balance at 31 Dec 20243: 5 334,968 With the additional floor space, Tracie and Conor anticipate that the sales volume of Pedal Classic and the sales volume of Folding Urban Dream will increase by 30% and 40%, respectively, for each month in 2025 based on the corresponding month in 2024 (e.g. Jan 2025's growth is based on Jan 2024, Feb 2025's growth is based on Feb 2024 etc). Given the increase in ebikes, repair hours should also increase. Tracie and Conor expect that there will be an increase in the repair hours by 20% for each month in 2025 based on the corresponding month in 2024, The expansion itself won't begin until January 2025. The expanded storefront along with all new fixtures and furnishings will involve an initial setup cost (i.e. cost of| project) which needs to be paid as a lump sum on 1st January 2025. This overall initial setup depreciates using the straight-line method and is expected to have a useful life of 10 years with zero residual value. Its depreciation is treated as 100% for facilitating the selling process and none for the general and administration purposes. To finance the project, a bank loan will be acquired which will cover 60% of the initial cost. The loan is with a local bank and it will start from 1st January 2025. The funds from this loan will be deposited into the business bank account on 1st January 2025. The loan is on an interest only arrangement with an interest rate of 12% per annum payable monthly. On top of the initial setup costs, the business will need to hire 2 additional Sale Assistants, 2 additional Bike Repair Technicians, and 1 additional Office Staff at the start of 2025. All new employees are expected to be paid the same rate as current existing staff. The expansion project would require the business to purchase one additional specialised equipment for repairs in order to meet increased demand, and thus, the initial cost of the specialised equipment will increase. The supplier of the specialised equipment has agreed to provide the business with a 20% discount to the price that the business has paid for the existing specialised equipment. This new equipment will need to be purchased at the start of February 2025, with payment for it to be made in April 2025. All other non-current assets will remain the same as 2024 amounts. All other fixed costs are assumed to increase by 80% based on 2024 amounts. After the 1st year of the new project (i.e. 2026), both the service volume and sales volume are expected to increase by 15% for each month in 2026 compared to the corresponding month in 2025. FactSheet - Data on 2024 Financial Year Jan-2024 Feb-2024 Mar-2024 Apr-2024 May-2024 Jun-2024 Jul-2024 Aug-2024 Sep-2024 Oct-2024 Nov-2024 Dec-2024 Sales Volume - Pedal Classic 214 225 200 213 203 254 247 222 132 162 177 190 Sales Volume - Folding Urban Dream 305 320 326 310 321 133 427 341 307 301 418 125 Service Volume - No. of Hours (Repairs) 277 291 296 282 292 394 388 310 279 274 380 386 Selling Price - Pedal Classic $ 500.00 Cost Price - Pedal Classic S 300.00 Selling Price - Folding Urban Dream $ 800.00 Cost Price - Folding Urban Dream S 650.00 Service Revenue Per Hour (Repairs) $ 80.00 Number of Sale Assistants: 3 Wage Rate Per Employee Per Month S 6,000 Number of Office Staff: 2 Wage Rate Per Employee Per Month 3,500 Number of Repair Technicians 4 Wage Rate Per Employee Per Month S 5,500Additional Information: Both Tracie and Conor are owners within the business and each of them draws an amount of 51357 per month. Each owner plans on increasing the drawings to 55801 per month starting from January of 2025. As the manager, Tracie keeps a close eye on inventory management and would like to always maintain a monthly ending inventory requirement of 20% of next month's sales. You can assume the beginning inventory for January 2025 to be 0 units for both Pedal Classic and Folding Urban Dream ebikes. All purchases of inventory with the current supplier are on a credit basis, with 60% of the amount settled in the same month of purchase and the remaining 40% settled one month after the month of purchase. You can assume that all credit amounts for purchase of inventory prior to lanuary 2025 have been settled. The business typically will have 70% of their sales of Pedal Classic and Folding Urban Dream ebikes as cash, with the remaining 30% on credit. Of the credit sales, 50% is collected in the month of sales, 30% is collected one month after the sales, and 20% is collected two months after the sales. You can assume that all credit amounts for sale of inventory prior to January 2025 have been settled. All customers coming in for ebikes repairs pay for the service in cash 100% of the time. The business has the following non-current assets: In 2024, the business purchased one specialised equipment to provide repairs for the ebikes. The total cost of such one equipment is 521960 and it is expected to last 5 years. Other office equipment has a total cost of 518420 and depreciates at 20% per annum. Shop fittings were originally purchased at 586400 and depreciate at 10% per annum. All non-current assets have 50 residual value and are depreciated using the straight-line method of depreciation. Other Fixed Costs: Marketing expense of 51944 per annum is paid and incurred evenly across 12 months. 56048 of business insurance is paid in advance every year on 1st January. This insurance covers the period 1st Jan to 31st Dec every year (50% store; 50% office). Bank fees work out to be 530 per month and are paid at the end of each quarter. 0On average, the office supplies are purchased, paid and expensed every month to the amount of 5130. Council rates are 51044 per year and are usually paid in December each year. The rates cover the period 1st Jan to 31st Dec every year. (60% store; 40% office) Rent is paid at the start of each quarter and works out to be 58030 per month. (80% store; 20% office) Water, gas and electricity are combined under utility expense which adds up to 5615 per quarter and is usually paid at the end of each quarter. (70% store; 30% office) *Mote: Quarter 1 runs from 1 Jan- 31 Mar; Quarter 2 runs from 1 Apr - 30 Jun; Quarter 3 runs from 1 Jul - 30 Sep; Quarter 4 runs from 1 Oct - 31 Dec. Selling, General, and Administrative Expense Budget ing Expenses iGeneral & Administrative Expenses {Total General & Admin. Expenses Total Selling, General & Administrative Expenses