Construct the Income statement part of a financial analysis that could be used t

Question

Construct the Income statement part of a financial analysis that could be used to evalaute the proposal. The time horizon for this proposal is 5 years. Show all subtotals in the income statement. Year 1 2 3 4 5 Sales Quantity- with proposal 126,000 132,300 138,915 145,861 153,154 Sales Quantity - without proposal 120,000 120,000 120,000 120,000 120,000 Present one-time change Proposed Sales Price $18.99 5% less Machined parts cost per unit $4.40 15% less Assembly cost per unit $56.00 0% no change S.G. & A $1,500,000 8% increase Cost of proposal $350,000 Proposal life span 5 years Income tax 14% annually MARR 10% annually Construct the Income statement part of a financial analysis that could be used to evalaute the proposal. The time horizon for this proposal is 5 years. Show all subtotals in the income statement. Year 1 2 3 4 5 Sales Quantity- with proposal 126,000 132,300 138,915 145,861 153,154 Sales Quantity - without proposal 120,000 120,000 120,000 120,000 120,000 Present one-time change Proposed Sales Price $18.99 5% less Machined parts cost per unit $4.40 15% less Assembly cost per unit $56.00 0% no change S.G. & A $1,500,000 8% increase Cost of proposal $350,000 Proposal life span 5 years Income tax 14% annually MARR 10% annually

Explanation / Answer

Add cost of proposal i.e. 350000 with 1st assume total of all 5 year(1+2+3+4+5) and assume it _____ 3rd and add ________2nd total of all five year (1+2+3+4+5) and assume it ______4th and compare 4th and 5th .when 4th will more proposal should rejected and if 5th will greater than 4 then proposal should be accepted.

Particular 1 2 3 4 5 Sale/unit 18.99 18.99-5% 18.99-5% 18.99-5% 18.99-5% minus-Machine cost per unit 4.4 4.4-15% 4.4-15% 4.4-15% 4.4-15% Minus-assembly cost/unit(which is doubt, plz answer) Profit/ unit beforefixed expenses(calculate) Sale quantity with proposal 126000 132300 138915 145861 153154 Total sale with proposal (total) Minus-S G & A 150000 150000+8% 150000+8% 150000+8% 150000+8% PBT Minus-Tax @14% PAT *PBIF 0.909 0.826 0.751 0.683 0.620 Profit with proposal (Total)_______1 Income without proposal(calculate same as of with proposal except os same quantity which will be sale quantity without proposal instead of sale quantity with proposal and assume it _________2

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