[ORDER] MILESTONE 3: Analysis of Forecasted Financials (60 points)

MILESTONE 3: Analysis of Forecasted Financials (60 points)

Milestone 3 provides a 5-year forecasted Income Statement and a 5-year forecasted Balance Sheet from which you will analyze your financials using CVP analysis to determine breakeven and other metrics. You will also apply capital budgeting techniques to determine the profitability of your forecasted financials from the standpoint of your investor. Based on your analysis, you will answer questions about your results. See the Course Project Milestone 3 template for additional details and requirements.

ItemGrading CriteriaPoints Possible MetricsAll work shown in a well-labeled, easy-to-follow format5 Accuracy of result35 Questions 1 – 4All parts of question fully answered and response shows thought and some depth of analysis4 points per question Limited or no errors in spelling, grammar, sentence structure or use of language1 point per question Total 60 points

SCENARIO: You invented “Dura-Clear windows” that never need washing!  Nothing sticks to them – not pollution, pollen, dirt, dust, bird droppings, fingerprints, nothing. You’ve invested all your own savings, your parents’ savings, and some of your friends’ savings as well into the R&D, production, and start-up of your business.  It’s been three years since you started selling your windows primarily to single-family homeowners, but now apartment building contractors across the nation have been requesting your windows. Unfortunately, you’re already operating at full capacity.  It’s time to make the switch from single-family homes to commercial buildings, but to do so requires a large infusion of funding for expansion.  You need more of everything:  space, equipment, employees, etc.

Ever the optimist, you applied to the TV show Shark Tank–where entrepreneurs compete for funding from angel investors (“sharks”)–to see if a shark will invest in your company and serve as a mentor as well. To your surprise, you were accepted to the show!  You’ve already prepared most of your marketing and sales pitches, and now it’s time to put together your forecasted financial statements.  You intend to show the sharks that backing your business would be a very profitable investment.  You also need to determine how much funding to ask for in exchange for how much ownership you’ll give up.

The following 2 Notes apply!

NOTE 1:  You must show ALL your work.  Either