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You are the owner of a small business. An opportunity to expand into a new market niche arose. It requires an initial equipment investment of
You are the owner of a small business. An opportunity to expand into a new market niche arose. It requires an initial equipment investment of $500,000. You will finance the entire amount with a 5-year payback at 8% interest rate (annual payments) Depreciation will follow MACRS-3 Sales projections look very promising as shown below: S250,000 in first year's projected sales Sales growth is expected to increase by 35% over the previous year's sales COGS is expected to be 25% of that years, sales Business ordinary tax rate is 29% A. Develop the following a. b. c. d. Loan amortization table (2 points) Depreciation table (2 points) Income Statement (3 points) Cash Flow Statement (3 points) B. Based on the information provided in the statements, would you pursue the opportunity? In-50 words, explain why or why not. (5 BONUS points)
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