The question being asked is to make a financial statement, and an income statement in an excel file.

You are working as a financial advisor for Mr. Poor, who is a well-known investor. Today Mr. Poor has explained to you a new business project that he has, and he wants you to prepare projected financial statements to have an idea of the profitability of the project.

Following we have the data that Mr. Poor has delivered to you:

Sales: The expected sales are 8.000.000 units, when the market is fully developed, we will need a period of five years in order to achieve that level. He expects to sale 10% on the first year, 30% on the second year, 60% on the third year, 80% on the fourth year until achieving 100% on the year 5.

The sales price per unit is 2.5 per unit.

Direct materials: The recipe of the product explains that direct material will have a cost of 1.6 per unit.

Production labor: The first year the plant needs 3 technicians with a cost of 35600 per person per year, 36 production workers with an annual cost of 27.890 per employee per year, and 1 manager with a cost of 80.000 per person per year. The next years the production labor will increase, due to the fact that the production of the plant will also be increasing. The year 2 the cost will be 6.25% higher than year 1, the year 3 the cost will be 15% higher than year 1, the year 4 the cost will be 20% higher than year 1 and in year 5 the cost will be 25% higher than year 1.

Investment: the required investment is 13.500.000, of which 10.000.000 will be depreciated over a period of 10 years and the rest will be depreciated over a period of 3 years. No more investments will be required during the years 2 until 5.

Utilities expense: We expect a cost of 0.20 per unit on the first year, and 0.22 for the remaining years.

Quality control: the control will be outsourced, and we expect a cost of 4% of our sales per year.

General and administration costs are expected to be 200.000 for the first year. For the following years the cost should increase in line with the sales volume, having a cost of 2.5% of sales.

The days to collect accounts receivable are 30, the days to pay suppliers are also 30.

The company will need an inventory of 30 days.

Mr. Poor is ready to invest 6.000.000. The investments need to be paid upfront and the rest of money needed will come from a bank credit line, you should make your own estimation of the amount needed.

The tax rate is 25% and the interest rate is 5%.

Mr. Poor is requesting from you a proposal of Profit & loss account for the next 5 years and a balance sheet for the same period.