Despite a loss of $10,000 in the first year the projected
profit for the 4 year period is $160,500.
The results of the spreadsheet showing both budget options can be reduced to
just one simple graph. This supported by market research would convince
management as to which option to choose.
Met North Energy Corporation Net Profit
Projections
Year 1996 1997 1998 1999
Sales $450,000
$455,000 $455,000 $460,000 Projected Sales $450,000
$523,250 $523,250 $529,000 Cost of Goods Sold $180,000
$185,000 $180,000 $185,000 Projected Cost $180,000
$203,500 $198,000 $203,500 Gross Profit $270,000
$270,000 $275,000 $275,000 Projected Gross Profit $270,000
$319,750 $325,250 $325,500
Less Expenses:
Salaries $80,000
$90,000 $100,000 $110,000 Advertising $50,000
$50,000 $50,000 $50,000 Increase in Advertising $100,000
$50,000 $50,000 $50,000
/ 1996 Interest $60,000 $60,000
$60,000 $60,000 Depreciation $40,000 $50,000
$55,000 $65,000
Total Expenses $230,000
$250,000 $265,000 $285,000
Projected Expenses $280,000
$250,000 $265,000 $285,000
Net Profit $40,000
$20,000 $10,000 -$10,000
Projected Net Profit -$10,000
$69,750 $60,250 $40,500
Increase in profit
$160,500 displayed 300 characters
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