Can you please form a balance sheet and income statement with the information:

Start-up costs for the business will require a large amount of expenses. First a section of land will need to be purchased. This area is expected to be 500ft2. This is a sufficient quantity of space to build the warehouse where will growing will be undertaken. The warehouse will be 300ft2. This size means there will be enough room for all business activities such as growing, organizing and distribution to occur. The block of land will be purchased in the rural Hamilton area, ten minutes’ drive from the CBD. The projected cost of the land along is $500,000. The cost to build the warehouse will be a further $1M, this will include the cost of erecting the building and all other expense’s related to its construction. The combined $1.5M will be funded through bank loans and government funding, which will cover approximately $100,000

Once the land and warehouse is built, operations will begin and other expenses will need to be accounted for. Electricity, internet and telephone will be the greatest expense worth $3000 per month. This is mainly due to the high usage of UV lighting throughout the plant to grow the cannabis. Staff wages will account for $500,000, $50,000 annually and ten staff employed. Operating expenses will be $10,000 yearly, this is for advertising and marketing. Depreciation of all machinery assets is calculated by 10% p.a straight-line method. These machines will cost $500,000 to purchase and used assist the growth cycle of the cannabis. Cost of goods sold per year will equal $275,000, this is mainly the seeds which are imported for growth. Revenue is projected to be $1.5M annually.

Overall, the start-up costs for the business will be $2M. To pay for this, $100,000 will be funded by the government and the remaining sum of $1.9M will be loaned from a bank over 10 years. Interest is 5% and loan repayments per year will be $190,000 add interest.

Assets of the company are land, valued at $500,000. Warehouse, valued at $1,000,000. Machinery, valued at $500,000 deprecated using straight line method at 5%.

Accounts receivable is $50,000.

Accounts payable is $125,000.

Canyon Buff Corp. has developed a new construction chemical that greatly improves the durability and weatherability of cement-based materials. After spending $500,000 on the research of the potential market for the new chemical, Canyon Buff is considering a project that requires an initial investment of $9,000,000 in manufacturing equipment.

• The equipment must be purchased before the chemical production can begin. For tax purposes, the equipment is subject to a 5-year straight-line depreciation schedule, with a projected zero salvage value. For simplicity, however, we will continue to assume that the asset can actually be used out into the indefinite future (i.e., the actual useful life is effectively infinite).

• Canyon Buff anticipates that the sales will be $30,000,000 in the first year (Year 1). They expect that sales will initially grow at an annual rate of 6% until the end of sixth year. After that, the sales will grow at the estimated 2% annual rate of inflation in perpetuity.

• The cost of goods sold is estimated to be 72% of sales.

• The accounting department also estimates that at introduction in Year 0, the new product's required initial net working capital will be $6,000,000. In future years accounts receivable are expected to be 15% of the next year sales, inventory is expected to be 20% of the next year’s cost of goods sold and accounts payable are expected to be 15% of the next year’s cost of goods sold.

• The selling, general and administrative expense is estimated to be $6,000,000 per year, but $1 million of this amount is the overhead expense that will be incurred even if the project is not accepted.

• The market research to support the product was completed last month at a cost of $500,000 to be paid by the end of next year.

• The annual interest expense tied to the project is $1,000,000

• Canyon Buff has a cost of capital of 20% and faces a marginal tax rate of 30% and an average tax rate is 20%.

QUESTION:

Calculate six-year projections for free cash flows. Remember to include cash flows from the income statement and depreciation, changes in net working capital, and capital expenditures or dispositions.

Canyon Buff Corp. has developed a new construction chemical that greatly improves the durability and weatherability of cement-based materials. After spending $500,000 on the research of the potential market for the new chemical, Canyon Buff is considering a project that requires an initial investment of $9,000,000 in manufacturing equipment.

• The equipment must be purchased before the chemical production can begin. For tax purposes, the equipment is subject to a 5-year straight-line depreciation schedule, with a projected zero salvage value. For simplicity, however, we will continue to assume that the asset can actually be used out into the indefinite future (i.e., the actual useful life is effectively infinite).

• Canyon Buff anticipates that the sales will be $30,000,000 in the first year (Year 1). They expect that sales will initially grow at an annual rate of 6% until the end of sixth year. After that, the sales will grow at the estimated 2% annual rate of inflation in perpetuity.

• The cost of goods sold is estimated to be 72% of sales.

• The accounting department also estimates that at introduction in Year 0, the new product's required initial net working capital will be $6,000,000. In future years accounts receivable are expected to be 15% of the next year sales, inventory is expected to be 20% of the next year’s cost of goods sold and accounts payable are expected to be 15% of the next year’s cost of goods sold.

• The selling, general and administrative expense is estimated to be $6,000,000 per year, but $1 million of this amount is the overhead expense that will be incurred even if the project is not accepted.

• The market research to support the product was completed last month at a cost of $500,000 to be paid by the end of next year.

• The annual interest expense tied to the project is $1,000,000

• Canyon Buff has a cost of capital of 20% and faces a marginal tax rate of 30% and an average tax rate is 20%.

QUESTION:

Use Excel to construct six-year pro forma income statements and calculate the incremental unlevered net income for the first six years.

Question:

In Case 1, when calculating incremental unlevered net income, should we include all the expenses mentioned in the case? If not, what expenses should we exclude and why?

Case 1:

Chem Tough Corp. has developed a new construction chemical that greatly improves the durability and weatherability of cement-based materials. After spending $500,000 on the research of the potential market for the new chemical, Chem Tough is considering a project that requires an initial investment of $9,000,000 in manufacturing equipment.

 The equipment must be purchased before the chemical production can begin. For tax purposes, the equipment is subject to a 5-year straight-line depreciation schedule, with a projected zero salvage value. For simplicity, however, we will continue to assume that the asset can actually be used out into the indefinite future (i.e., the actual useful life is effectively infinite).

 Chem Tough anticipates that the sales will be $30,000,000 in the first year (Year 1). They expect that sales will initially grow at an annual rate of 6% until the end of sixth year. After that, the sales will grow at the estimated 2% annual rate of inflation in perpetuity.

 The cost of goods sold is estimated to be 72% of sales.

 The accounting department also estimates that at introduction in Year 0, the new product's required initial net working capital will be $6,000,000. In future years accounts receivable are expected to be 15% of the next year sales, inventory is expected to be 20% of the next year’s cost of goods sold and accounts payable are expected to be 15% of the next year’s cost of goods sold.

 The selling, general and administrative expense is estimated to be $6,000,000 per year, but $1 million of this amount is the overhead expense that will be incurred even if the project is not accepted.

 The market research to support the product was completed last month at a cost of $500,000 to be paid by the end of next year.

 The annual interest expense tied to the project is $1,000,000.

 Chem Tough has a cost of capital of 20% and faces a marginal tax rate of 30% and an average tax rate is 20%.

Problem 17-3A Applying activity-based costing LO P1, P3, A1, A2, C3

[The following information applies to the questions displayed below.]

Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records.

Additional information on the drivers for its production activities follows.

Problem 17-3A Parts 2, 3 & 4

2, 3 & 4. Compute the activity overhead rates using ABC. Combine the grinding and polishing activities into a single cost pool. Determine overhead costs to assign to the following jobs using ABC. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286? (Round your activity rate and average overhead cost per unit to 2 decimal places. Round "overhead assigned" to the nearest whole dollar.)
                                               

                                       Overhead Cost----Activity Drivers-----Activity Rate---Activity Driver incurred----------Overhead assigned------Activity Driver incurred------Overhead Assigned

Grinding and Polishing---------------------------/--------------/Machine Hours-------------/--------------------------------/-------------------------------------/------------------------------------/------------------------------------l

Product Modification-----------------------------/---------------/Engineering Hours--------/--------------------------------/-------------------------------------/------------------------------------/-------------------------------------l

Providing Power----------------------------------/----------------/Direct Labor Hours--------/-------------------------------/--------------------------------------/------------------------------------/-------------------------------------l

System Calibration-----------------------------/---------------/batches-------------------------/-------------------------------/--------------------------------------/-------------------------------------/------------------------------------l

A bank offers 9.00% on savings accounts. What is the effective annual rate if interest is compounded daily?

Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal format rounded to 6 decimal places (ex: 0.092434))

A bank offers 9.00% on savings accounts. What is the effective annual rate if interest is compounded continuously?

Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal format rounded to 6 decimal places (ex: 0.092434))

Assume a bank offers an effective annual rate of 6.70%. If compounding is quarterly what is the APR?

Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal format rounded to 6 decimal places (ex: 0.092434))

Assume a bank offers an effective annual rate of 7.39%. If compounding is monthly what is the APR?

Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal format rounded to 6 decimal places (ex: 0.092434))

Problem 3) Butterflies show 3 phenotypes due to incomplete dominance at the D locus with alleles D^Y and D^B giving green phenotype in heterozygotes and yellow and blue in homozygotes

a) A population of butterflies showed 49% yellow, and 51% blue and green. What percentage of the gametes for the next generation would contain the D^B allele?

b) In another population only 1% of the butterflies are blue, What is the D^Y allele frequency?

c) If the butterflies were subject to predation by birds that could easily detect blue & yellow individuals what effect would you expect this to have on the genotype and allele frequencies over time? Indicate possible percentages.

Problem 4)   About 7% of men in a population are red-green colour blind due to a sex-linked recessive gene. Assuming random mating in the population with respect to colour blindness;

a) What percentage of women would be expected to be colour blind?

b) What percentage of women would be expected to be heterozygous?

c) What percentage of men would be colour blind in the next generation?

1.