Evaluation of Proposed Expansion, Business Plan Project, and Presentation Summary

timer Asked: Oct 22nd, 2015

Question description

Part One:  Evaluation of Proposed Expansion

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.

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