Instructions on how to do the Justification piece of the milestone

Projecting financial impact of proposed expansion

Instructions on how to do the Justification piece of the milestone:

Project the incremental, annual, and cumulative cash benefits and outflows associated with the proposed expansion for the next seven to 10 years, using a spreadsheet or other relevant presentation vehicle to support your narrative. Be sure to justify your assumptions and methodology based on sound microeconomic and financial principles. For example, what assumptions have you made about demand, price, volume, capital purchase costs, incremental hiring, and so on? 2. Develop a consolidated financial projection of revenue, pretax income, and cash flow for the overall business, over that same number of years, both with and without the proposed investment. Use a spreadsheet or other relevant presentation vehicle to support your narrative, being sure to describe any relevant assumptions.

So what I expect in this section is for you to determine the revenues, expenses and cash flows for 10 years of your project only.  So if you think your project will make $500,000 the first year and 2% more each year after that:

First chart shows Revenue less cost of goods sold less expenses =- Earnings Before Taxes.  Then the taxes are figured (I used 34%) then subtracted from EBT to get to Net Income.

The second chart, you would need to add the numbers to the most recent financials of the company and then make assumptions as to the revenue growth of the company without the project.  I left the numbers out because I really couldn't make a good guess but you would take whatever the last year’s  revenue for the company is and add in what percent you thought it would grow (previous assignment) and then add in your revenue from you project.  Then fill in each box the same way.

Justification: Financial Impact: Expansion Project the incremental, annual and cumulative cash benefits and outflow associated with the proposed EXPANSION for the next seven to 10 years

Be sure to justify your assumptions and metho9dology based on sound microeconomic and financial principles.

Justification: Financial Impact: Consolidated  Develop a CONSOLIDATED financial projection of revenue, pretax income and cash flow for the overall business, over that same number of years, both with and without the proposed investment.

Financing: Global Capital Markets Weight the pros and cons of raising money using internal financial mechanisms versus seeking funding through global capital markets via loans, commercial paper, bonds, or equity financing.  Which might be viable alternatives should the loan not be approved? 

Financing: Business Combination Assess the visibility of a business combination  as a mechanism for expanding into the new market.  Is this a reasonable option for the company?  Why or why not

Track Record: Financial Performance Convincingly argue that your organization is on solid financial footing and thus at a low risk for default.  Support your argument with appropriate financial statements, ratios and other indicators of financial performance and health.

Track Record: Legal and Ethical Convincingly argue for your organization’s trustworthiness, providing credible evidence of legal and ethical financial behavior.  For example, this might include recent audit results, credit history, absence of significant lawsuits, recalls, or regulatory judgements, or other evidence designed o show that the company holds itself to the highest legal and ethical standards.