1) Forecast the income statements and balance sheets for the next 5 years. Is $1,575,000 New Tech’s total need for external financing? 2) What is the break-even level of sales in 2001? 3) When do...

Forecast the income statements and balance sheets for the next 5 years of New Tech Distributor Corporation
1. Is $1,575,000 New Tech’s total need for external financing?
For 2001, the external financing needed is New Tech is well enough and is within the estimated amount of $1575000. It can be observed from the profit and loss account estimated for 2001 that the projected retained earnings generated is at $1264000. Thus the amount that can be saved by New Tech is to $311000. The external financing will be mostly in the form of working capital loan combined with investment in marketable securities by New Tech.
2. What is the break-even level of sales in 2001?
    Break Even Analysis data
    Particulars
    2001
    Output
    39000
    Sales Price per unit @ $100
    100
    COGS per unit @ $31.4105
    31.4103
    Sales
    3900000
    Variable Costs
    1225000
    Fixed Costs:
     
    Selling Expenses
    910000
    Administrative Expenses
    590000
    Income Tax
    385000
    Interest Expenses
    75000
    Total Fixed Costs
    1960000
    Net Profit
    715000
As on 2001, we have estimated an output of 39000 units at the rate of $100 per units. So at this level of output the net profit of New Tech is observed to be at $715000. But we need to estimate the sales price per share at which the net profit will be equal to zero. This will help us to derive the breakeven point. Below is the projection we have constructed by applying goal seek formula in excel to arrive at the breakeven point of sales per unit.
    Change in Price
    Particulars
    2001
    Output
    39000
    Sales Price per unit @ $100
    $81.67
    COGS per unit @ $31.4105
    31.4103
    Sales
    3185000
    Variable Costs
    1225000
    Fixed Costs:
     
    Selling Expenses
    910000
    Administrative Expenses
    590000
    Income Tax
    385000
    Interest Expenses
    75000
    Total Fixed Costs
    1960000
    Net Profit
    0
In the above illustration we can observe that the net profit is zero at a sales price of $81.67 per unit. For this we have used the goal seek formula in excel and arrived at this level.
3. When do you estimate New Tech will hit break-even?
    Change in Price
    Change Units Sold
    Particulars
    2001
    Particulars
    2001
    Output
    39000
    Output
    28576
    Sales Price per unit @ $100
    $81.67
    Sales Price per unit @ $100
    100
    COGS per unit @...