Your assignment is to develop two plans Plan A: You are able to obtain a PPP loan and an EIDL loan Plan B: You are able to obtain a PPP loan but no EIDL loan and you must borrow the remainder of the necessary funds from your local bank. For each plan: a. Determine how much you need to borrow in order to make sure you will be able to keep operating for the next six months. Assume the money will come through on June 1st. b. Determine how many employees you can rehire. How does this impact the amount you will have forgiven with the PPP loan? Make sure to factor in the amount of the PPP loan that is forgiven. c. Report the corresponding payment that will result for each funding source for each plan. d. Report the total cost (including total interest paid) of each plan. e. Analyze the pros and cons of each plan and rank them with clear reasoning to back up your ranking. While Plan A will likely be the ideal situation, you may not get it. This assignment is also intentionally left somewhat vague. The rules for each program may not be completely clear. Welcome to real life!

April July August Sales Revenue January 25,000 February March 25,000 May 6,250 June 6,250 September October 13,750 16,250 November December 18,750 21,250 250 7,500 8,750 1,250 # of Employees 22 1.5 1.5 22 2 2 Expenses Food/Baverages Packaging Total Expense 7,500 3 750 7,500 750 8,250 75 7.5 82.5 1,562.5 187.5 1,750 1,562.5 187.5 1,750 1.875 225 2,100 2,187.5 262.5 2,450 2,812. 5 337.5 3,150 .437.5 412.5 3,850 4,062.5 487.5 4,550 4,687.5 5625 5,250 5,312.5 637.5 5,950 8,250 30 18 Payroll Opening Hours per week Your salary Employees salary ($20/hr) Total Payroll 4 000 5.000 4.800 9.800 30 5,000 4.800 9,800 2 3.000 160 3,160 16 4.000 1,280 5.280 16 4.000 1,280 5,280 16 4.000 1.920 5,9201 16 4.000 1.920 5.920 20 4,000 3,200 7,200 22 4,000 3,520 7,5201 26 4,500 4,160 8,660 30 5.000 4.800 9,800 2.880 6,880 400 400 400 500 500 Operating expenses Phone/Internet/Creadit Card Processing Fuel Maitenance Insurance Start-up Load Commissary Kitchen Total Operating Costs 500 100 100 400 500 100 250 1,500 750 3,500 400 500 100 250 1,500 750 3,500 100 400 500 100 250 1,500 750 3,500 400 500 100 250 1,500 400 500 100 250 1,500 750 3,500 400 500 100 250 1,500 400 500 100 250 250 400 500 100 250 1,500 750 3,500 400 500 100 250 1,500 750 3,500 250 1,500 750 3,500 250 1,500 750 3,500 750 750 1,500 750 3,500 1,500 750 3,500 3,500 3,500 Net Profit L 3,450 3,450 -6,492.5 -4,280] -4,280] -4,020 -3,120 -2,280 -800 680| 1,340 2,000| Total Net Profit of the entire year 2020 -14,352.5 PPP LOAN (Max) 24,500 (This is 2 years and interest rate of 1% per year compouned monthly) As a result of the total net profit.it needs to borrow a loan of $14352.50 to run the business. From the TVM Solver, we found that the monthly payment will be $604.27. April July August Sales Revenue January 25,000 February March 25,000 May 6,250 June 6,250 September October 13,750 16,250 November December 18,750 21,250 250 7,500 8,750 1,250 # of Employees 22 1.5 1.5 22 2 2 Expenses Food/Baverages Packaging Total Expense 7,500 3 750 7,500 750 8,250 75 7.5 82.5 1,562.5 187.5 1,750 1,562.5 187.5 1,750 1.875 225 2,100 2,187.5 262.5 2,450 2,812. 5 337.5 3,150 .437.5 412.5 3,850 4,062.5 487.5 4,550 4,687.5 5625 5,250 5,312.5 637.5 5,950 8,250 30 18 Payroll Opening Hours per week Your salary Employees salary ($20/hr) Total Payroll 4 000 5.000 4.800 9.800 30 5,000 4.800 9,800 2 3.000 160 3,160 16 4.000 1,280 5.280 16 4.000 1,280 5,280 16 4.000 1.920 5,9201 16 4.000 1.920 5.920 20 4,000 3,200 7,200 22 4,000 3,520 7,5201 26 4,500 4,160 8,660 30 5.000 4.800 9,800 2.880 6,880 400 400 400 500 500 Operating expenses Phone/Internet/Creadit Card Processing Fuel Maitenance Insurance Start-up Load Commissary Kitchen Total Operating Costs 500 100 100 400 500 100 250 1,500 750 3,500 400 500 100 250 1,500 750 3,500 100 400 500 100 250 1,500 750 3,500 400 500 100 250 1,500 400 500 100 250 1,500 750 3,500 400 500 100 250 1,500 400 500 100 250 250 400 500 100 250 1,500 750 3,500 400 500 100 250 1,500 750 3,500 250 1,500 750 3,500 250 1,500 750 3,500 750 750 1,500 750 3,500 1,500 750 3,500 3,500 3,500 Net Profit L 3,450 3,450 -6,492.5 -4,280] -4,280] -4,020 -3,120 -2,280 -800 680| 1,340 2,000| Total Net Profit of the entire year 2020 -14,352.5 PPP LOAN (Max) 24,500 (This is 2 years and interest rate of 1% per year compouned monthly) As a result of the total net profit.it needs to borrow a loan of $14352.50 to run the business. From the TVM Solver, we found that the monthly payment will be $604.27