Six Key Financial Assumptions

• Startup cost $350,000
  • $150,000 to purchase building
  • $10,000 for renovations
  • $75,000 for supplies
  • $115,000 for additional expenses
• Sales and Revenue - $600,000
  • $50,000 in sales per month
  • Based on 50 jobs at $250 per job

• Operating costs - $156,000
  • $13,000 per month
  • Based on supplies, utilities, and staff
• Borrowing - $350,000
  • Based on money needed for startup cost
  • Interest owed to bank 6%

• Equity returns 2% compounding annually
  • Based on 2% real estate growth assumption
• Company value ???

Balance sheet

31-Dec-2020

Assets

Cash : $000,000

Accounts Receivable: $000,000

Long Term Assets: $000,000

Total: $000,000

Liabilities & Equity

Accounts Payable: $000,000

Borrowing: $000,000

Retained Earnings: $000,000

(First year so no retained earnings from first year)

Earnings: $000,000

Total: $000,000

Using the information from the key assumptions please solve the company value portion as well as the balance sheet for the first year of the start up company.