Financial managment

timer Asked: Nov 13th, 2013

Question description

You are a small business owner and you have the opportunity to expand your facility, which will increase your production capacity over the next 5 years.  The expansion will cost $60,000 and additional equipment will cost another $20,000.


  • Additional profits after tax will amount to $18,000 per year.  Your cost of capital is 8%.  Should you go ahead with the expansion?  Why or why not?  HINT: Use NPV.

Part Two: Business Plan Project, Week 3, and Presentation Summary

Continue to work on your business plan. This week, you will be working on capital expenditures and the sources of funding to finance them.


  1. Your business plan should include at least one major capital expenditure. Decide when it will be purchased and how it will be funded. The documentation should include your analysis of the project and your basis for making the investment, and the timing of investment.

  2. Decide on your sources of funding, describe them, and justify your decision. You may fund part of the business with your personal savings, but you should also include at least one additional source of funds to complete the funding.

  3. Last week, you worked on pro forma financial statements. Update your projected financial statements to reflect the capital expenditure and the sources of funding.

  4. Prepare a Microsoft PowerPoint presentation that summarizes your findings for your Business Plan Project to date.

Studypool has helped 1,244,100 students
flag Report DMCA
Similar Questions
Hot Questions
Related Tags

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors