World - Wireless Device Retail Store

1910 Words8 Pages
World - Wireless Device Retail Store Budget Proposal For [2011 to 2014/15] BUSN-278 [Term] Professor[name] DeVry University Table of Contents |Section |Title |Subsection |Title |Page Number | |1.0 |Executive summary | | |3 | |2.0 |Sales Forecast | | |4 | | | |2.1 |Sales Forecast…show more content…
This will see the firm generate enough cash flow and achieve a payback period of just under six months. So looking at cash flows, the firm will be able to run itself within the first six months. The sales will also grow at five times the GDP growth that will see it reach profitability in the third year The firm has a negative NPV of minus 10925.95 USD while the accounting rates of return are 314, 409, 496 and 597 for the first four years (2011 to 2014). It will have a payback period of just 0.46, which makes it an ideal business. The firm will make net losses in the first two years though the second years’ loss will be less than year one loss and will achieve net profitability in the third year [pic] Sales forecast is the projected sales over a period based. Sales can be forecast based on economic growth and GDP 2.1 Sales Forecast | |Year 1 |Year 2 |Year 3 |Year 4 |Year 5 | |Sales |107 2500.00 |1 222 650 |1 430 500.5 |1 673 685.6 |1 966 580.6 | GDP estimates obtained from the Central Budget Office (CBO) 2.2 Methods and Assumptions Given that inventories are expected to be 10% of next month sales, monthly sales volume can be deduced by reverse calculation. Yearly sales growth for such an industry which is a mature industry can be forecasted to be the same
Open Document