Sample Essay
The capital expenditures that would be incurred for the business venture include those for acquiring supplies for the company, leasing land and building for office space production and operations as well as manufacturing facilities and plants. The fixed costs that would need to be incurred include the costs of administration, the management costs, and the shipping cost, the cost associated with marketing and promotions and the cost of managing the human resource. The variable costs however would be the costs associated with raw materials and labor. Additional costs would come in the form of research and development costs.
The proposed income statement for the first three years of operation that is provided in the appendix section depicts that the net revenue in the form of net cash flow from operations would be negative for the first year at -$867,145, while the second year it would increase to $310,040 and in the third year it is forecasted to further increase to $4,065,547.
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