You are required to analyse the case study given below and present a $3-$year forecast financial analysis. Your answer should include the following:

$1.3-$Year Income Statement $-(1$st to $3$rd year on monthly basis$)$

$2.3-$Year Cash Flow Statement $-(1$st to $3$rd year on monthly basis$)$

$3.$ Key Assumptions Made

$4.$ Determine the total investment required, proportion & justification for equity$-$debt ratio required from investor.

$5.$ Expected Financial Returns

$$ Weighted Average Cost of Capital $($WAC$)$

$$ Valuation $($based on the discounted cash flow method$)$

$$ Net Present Value $($NPV$)$

$$ Internal Rate of Return $($IRR$)$

$6.$ Percentage Shareholding Offered to Investor

Pet Hotel Business Case Study:

As pet owners plan for their overseas trips, they are faced with the problem of arranging for the care of their $$furkids$$ in their absence$.$

While this is an issue for pet owners, you see this as an opportunity. You believe there is an attractive business proposition to start a pet hotel to meet the growing demand for pet boarding services, particularly in the mid$-$to$-$high tier segment as $$pawrents$$ are now more willing to splurge on pampering their $$furkids$,$ ensuring that their pets will be well$-$taken care of whilst they are away.

Starting and operating a pet hotel requires significant investment and good planning before commencing on this venture.

The primary revenue generating activity of the proposed business must be for an independent pet boarding business. Operating as a franchised unit is not allowed. The proposed location for the pet hotel is at the row of shophouses along Jalan Mas Puteh, West Coast Road, Singapore.

There are three adjoining single$-$storey vacant units, each unfurnished at $1,000$ square feet. Rental for each unit is at $$5,000$ per month, fixed for a minimum $3$year lease. The landlord has offered a discount of $10\%$ if you rent two adjoining units or $15\%$ if you rent all three units.

In deciding the space required, you need to consider the current requirements of the proposed business, the maximum foreseeable operating capacity and ability to accommodate future expansion of the business. Changes to the space leased during the tenancy term is not permitted.

Rental deposit required is equivalent to $2$ months$$ rental, to be paid together with the first month$$s rental upon commencement of the lease. Sub$-$letting is not allowed.

The first month of operations is the gestation period of the new business, e$.$g$.,$ staff recruitment, renovation, staff training and etc. The first revenue can only be received by the new business from the second month onwards in the financial forecast.

The depreciation for any capital expenditure is a straight line over three $(3)$ years.

You are able to invest $$60,000$ of the Total Investment Required $($TIR$)$ as your Equity Capital. The Balance of the TIR would be funded by the potential investor. However, the investor is only willing to invest between $40\%$ to $70\%$ of the Balance of the TIR as his Equity Capital $($you will need to propose the amount and subsequently determine the corresponding shareholding offered to the investor$).$

The remaining shortfall in the Balance of the TIR will be extended as a loan from the investor to the business at the start, with only interest payable each month $($see further for Cost of Debt$)$ and the full repayment of the principal on the $36$th month.