Assignment:
Please demonstrate the validity of Dwayne and Fred's original financial assumptions by preparing the appropriate financial statements and answering the following questions using the assumptions below. State any additional assumptions you make:
1. Was $300,000 enough to start this business? What was their peak cash need (it will be $300k + or - their cash shortage or overage)? Did they need more or less than $300k or less? If so how much more or less did they need?
2. In what month did their peak cash need come?
3. In what month did they achieve operational break-even (GM >, = Operating expenses)?
4. What was the first year's net income?
5. What was the cash balance at the end of the first year?
6. Is this company worth pursuing? Why?
Attachment:- Case.rar