Using the results from Question 2, prepare a spreadsheet modeling the initial investment and the incremental annual cash inflows and outflows for each situation of the next five years

Results from Question 2

Background Data

2. Situation 2: Investment in Larger Trucks&Trailers Total Investment required to be made $24,475 Statement of Project/Loss in a vear Particulars Calendar days needed to complete the project Revenues per calendar day Total Revenues Variable Costs Transportation cost per mile Average round trip to job site; (miles per day) Transportation cost per calendar day Total transportation cost (100 x 10 days) Per Day 10 days Project $375 $3750 $1.25 80 100 $1000 190 Base Salary per day Total Cost for 7 days Total variable cost per calendar day 1330 2330 190 Contribution Margin $1420 Fixed Cost Setup costs Fencing costs per square foot Average linear foot of fence needed per job (100) 0.75 962 (721.50) Profit per Project $598.50 Total number of projects that can be taken in a year is 37 jobs. Total profit in a year from 37 jobs 37 jobs x 598.50 -$22,144.50 Incremental profit from larger trucks & Trailers $22,144.50 lotal profit from bigger trucks and trailers Less: Total profit under Incremental Profit ent situation Note: The shepherd & dog costs taken for 7 days because 43560 sg ft (1 acre) of land, a goat on a daily purge rate of 250 sg/ft per goat in 174.24 goat days can be completed. Therefore even if larger trucks and trailers are used the Shepperd and goats cost will remain unchanged Exhibit 2 FIXED AND VARIABLE COSTS FOR RESORT JOB (in U.S. dollars) Description Truck and trailer operation and maintenance costs per mile transportation costs Round trip to resort iob site (miles per da Shepherd and dog costs Setup costs for resort iob Fencing costs per linear foot Linear feet of fence needed for resort iob $0.63 80 190.00 100.00 $0.75 962 per da Exhibit3 COSTS FOR LARGER TRUCK AND TRAILER (in U.S. dollars) Description Cost Heavy du 20' used livestock trailer Taxes, title, etc Total investment ickup truck 15,000 7,250 24,475 Exhibit 4 ESTIMATED FIXED AND VARIABLE COSTS FOR GOAT RENTAL OPERATION WITH A LARGER TRUCK AND TRAILER (in U.S. dollars) Larger truck and Description trailer Estimated truck and trailer operation and maintenance costs per mile (transportation costs Average round trip to job site (miles per da Shep Setup costs per iob Fencing costs per linear foot Average linear feet of fence needed per job $1.25 80 herd and dog costs per da $0.75 962 2. Situation 2: Investment in Larger Trucks&Trailers Total Investment required to be made $24,475 Statement of Project/Loss in a vear Particulars Calendar days needed to complete the project Revenues per calendar day Total Revenues Variable Costs Transportation cost per mile Average round trip to job site; (miles per day) Transportation cost per calendar day Total transportation cost (100 x 10 days) Per Day 10 days Project $375 $3750 $1.25 80 100 $1000 190 Base Salary per day Total Cost for 7 days Total variable cost per calendar day 1330 2330 190 Contribution Margin $1420 Fixed Cost Setup costs Fencing costs per square foot Average linear foot of fence needed per job (100) 0.75 962 (721.50) Profit per Project $598.50 Total number of projects that can be taken in a year is 37 jobs. Total profit in a year from 37 jobs 37 jobs x 598.50 -$22,144.50 Incremental profit from larger trucks & Trailers $22,144.50 lotal profit from bigger trucks and trailers Less: Total profit under Incremental Profit ent situation Note: The shepherd & dog costs taken for 7 days because 43560 sg ft (1 acre) of land, a goat on a daily purge rate of 250 sg/ft per goat in 174.24 goat days can be completed. Therefore even if larger trucks and trailers are used the Shepperd and goats cost will remain unchanged Exhibit 2 FIXED AND VARIABLE COSTS FOR RESORT JOB (in U.S. dollars) Description Truck and trailer operation and maintenance costs per mile transportation costs Round trip to resort iob site (miles per da Shepherd and dog costs Setup costs for resort iob Fencing costs per linear foot Linear feet of fence needed for resort iob $0.63 80 190.00 100.00 $0.75 962 per da Exhibit3 COSTS FOR LARGER TRUCK AND TRAILER (in U.S. dollars) Description Cost Heavy du 20' used livestock trailer Taxes, title, etc Total investment ickup truck 15,000 7,250 24,475 Exhibit 4 ESTIMATED FIXED AND VARIABLE COSTS FOR GOAT RENTAL OPERATION WITH A LARGER TRUCK AND TRAILER (in U.S. dollars) Larger truck and Description trailer Estimated truck and trailer operation and maintenance costs per mile (transportation costs Average round trip to job site (miles per da Shep Setup costs per iob Fencing costs per linear foot Average linear feet of fence needed per job $1.25 80 herd and dog costs per da $0.75 962