FMA III 4,5,7: Explain the parts of the business plan.
4 . Explain the parts of the business plan. Your response should be at least 250 words in length. You are required to use at least your textbook as source material for your response. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations. 5. Construct a pro forma income statement for the first year and second year for the following assumptions: • Units of Sales in Year 1: 100,000 • Price per Unit: $10 • Variable cost per unit: 30% • Fixed Costs: $120,000 • Income taxes: 15% • Interest Expense: $200,000 • In year 2, Price per unit increases to $11.50, and unit of sales increases by 3%, all other assumptions remain the same. 7. Calculate a table of interest rates based on the following information: • The pure interest rate is 1.6% • Inflation expectations for year 1 = 3%, year 2 =3.5%, years 3-5 =5% • The default risk is .1% for year one and increases by .2% over each year • Liquidity premium is 0 for year 1 and increases by .2% each year • Maturity risk premium is 0 for years 1 and 2 and .2% for years 3-5
FMA IIIName:Institution:Date: 4. Explain the parts of the business plan. A business plan is a written formal statement that describes in detail how a business is going to achieve its goals. It provides a plan for reaching those goals and describes why those goals are believed to be attainable. It`s a carefully constructed guide for a person starting a business (Pride, Hughes, & Kapoor , 2012). In this paper parts of business plan are identified and discussed. According to Pride (Foundations of business), a business plan can be broadly divided into 12 parts. It starts with an introduction or a brief statement of the business plan. Then goes the executive summary, which provides a brief review of the information within the plan. It highlights the business plan high points. It identifies the industry and target markets, competitors and requested loan amount and the ideal repayment plan. Then there are benefits to the community outl...