XYZ Corporation is seeking an investment from the BSAD 200-1 Investment Team to expand operations and provided the attached financial statements during due diligence. XYZ is projecting a 10% growth rate in sales over each of the next five years and a 15% growth rate in payroll due to rising wage pressure from low unemployment conditions. The Cost of Goods Sold will increase at 10% annually due to rising pressure on commodity pricing and rent is forecast to grow by 8% for each of the next five years as well. Your job as our Investment Analyst is to create a pro-forma Income Statement for each of the next five years and decide whether to invest in XYZ Corporation, citing reasons why or why not. What trends are you seeing and to what factor(s) would you attribute these trends?

XYZ Corp Income Statement 10% 2021 2022 2023 2024 Growth Rate 2020 20,000 Sales 15% 10% F Payroll COGS Rent Total Expenses 8% (100,000) (40,000) (40,000) (180,000) - Net Profit - - - - Profit Margin