COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MARKETING MANAGEMENT

BUSINESS PLAN FOR BAKERY PRODUCTS

NAME ID No

NASHARA MULATU _______________________________________002603

SUBMITTED TO: HABTAMU K.(MA)

DEC, 2020
WOTARA

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TABLE OF CONTENTS
Page
1. EXCUTIVE SUMMARY…………………………….........................................2
1.1 Introduction------------------------------------------------------------------------------2
1.2 The business------------------------------------------------------------------------------2
1.3. Products and services-------------------------------------------------------------------3
1.4. The market--------------------------------------------------------------------------------4
1.5. Economic and social benefit------------------------------------------------------------4
1.6 Financial considerations------------------------------------------------------------------4
2.Business Profit-------------------------------------------------------------------------------5
2.1 Objectives----------------------------------------------------------------------------------5
2.2 Business Mission--------------------------------------------------------------------------5
2.3Business vision-----------------------------------------------------------------------------5
2.4 Core values---------------------------------------------------------------------------------5
2.5Keys to success-----------------------------------------------------------------------------6
2.6 Business ownership-----------------------------------------------------------------------6
2.7 Business History---------------------------------------------------------------------------7
3 Situation Analysis----------------------------------------------------------------------------7
3.1SWOT Analysis-----------------------------------------------------------------------------8
4 Production Plan-------------------------------------------------------------------------------9
4.1 Future Product------------------------------------------------------------------------------9
5 Market plan andAnalysis--------------------------------------------------------------------10
5.1 Market Segmentation----------------------------------------------------------------------11
5.2 Target market Segmentation Strategy----------------------------------------------------11
5.3 Service bsusiness Analysis-----------------------------------------------------------------11
5.4 competion and Buying patterns------------------------------------------------------------13
5.5 Strategy and Implementation---------------------------------------------------------------13

2
6 Human resources and its management Plan-----------------------------------------------------14
6.1 Management Team-------------------------------------------------------------------------------15
6.2Personnel Plan------------------------------------------------------------------------------------15
7 Financial Analysis--------------------------------------------------------------------------------16
7.1 Financial plan------------------------------------------------------------------------------------17
7.2 breakeven analysis-------------------------------------------------------------------------------17
7.3 Sales forecast--------------------------------------------------------------------------------------20
8. Appendix-------------------------------------------------------------------------------------------.22

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1. Executive Summary

We are XYZ CAMPANY, an innovative retail bakery in WOTARA aims to offer high quality bakery
products at a competitive price to meet the demand of the middle- to higher-income households, school,

café and restaurant, and others. We will sell freshly baked breads and desserts made from the highest
grade of ingredients, filling the Wotara area’s need for a classic bakery what will make our business
stand out in the baked goods industry is our drive to let the customers be inspired through their own
designed creations. In our store, located conveniently on the bypass, we will have specified stations
with our fun and easy-to-use design tablets for the customers to fashion their own cakes or cupcakes,
which then our bakers will create for them.

values having great customer service, keeping up-to-date with technology to remain as competitive and
customer friendly as possible, and contributing to the local community through non-profit
organizations, like clinic, education, through donating our two day-old baked goods among other
things.
We believe that we are coming into the retail bakery industry at an optimal time, despite the bad
economy of today. The only competition XYZ CAMPANY predicts to have is the bakery sections is
MANAYE AND HAYISO, which are on either ends of town. These big two will be our greatest threat.
Fortunately, the economy has not hurt bakeries.
Our target market will be the higher end of middle class workers and above, however effort will be
made to give lower incomes opportunities to buy our products, such as through our day-old bread
section. Our prices will tend to be higher than those of our local competitors, mainly for the reason that
we strive for higher quality in our products.
XYZ CAMPANY will be a limited liability partnership between NASHARA and FRIENDS, who will
also act as operators. All partners will share equal ownership of the company.
.

We will require 383,000 for start-up cost, and from which 80,000will be placed fully on bank long
term loan, but we predict that the debt will be paid after two years. In the beginning we will only need

4
 two minimum-wage workers aside from the three of us participating in the business plan to run the
bakery but more may be added as finances allow it and demand requires it.

1.1. Introduction

XYZ CAMPANY will be run as a partnership between NASHARA and Friends. This Business plan
is prepared for the purpose of providing an understanding of bakery business. A brief analysis on
baking is thus conducted to identify the current market trend and to share the shortage and unsatisfied
market in Wotara and nearby small towns. XYZ CAMPANY is a start-up bakery producer and retail
establishment located in Sidama region Hawassa Wotara town. XYZ CAMPANY expects to catch the
interest of a regular loyal customer base with its broad variety of bread products. The company plans
to build a strong market position in the town. XYZ CAMPANY aims to offer its products at a
competitive price to meet the demand of the middle-to higher-income local market and government
and private organizations.

1.2The business

XYZ CAMPANY is a limited liability partnership engaged in the bakery business. It is equally
owned by 10 partners and managed by one. The business is controlled and managed by Partner. Mr.
Nashara has graduated in Marketing management in Wachemo University and has extensive
experience in sales, marketing, and management. The owner has the capacity to utilize traditional and
more advanced bakery technologies to produce new breads and pastry with locally-adapted
technologies. The partnership intends to hire two full-time bread bakers and two part-time baristas to
handle customer service and day to day operations.

1.3 Products and Services

XYZ CAMPANY fears a broad range of bread products, all from high quality wheat floors. XYZ
CAMPANYprovide food to all of its customers by providing each customer bread products made to
suit the customer. The bakery provides freshly prepared bakery products at all times during business
operations. Six to eight moderate batches of bakery and pastry products are prepared during the day to
assure fresh baked goods are always available. XYZ CAMPANY also plans to produce its own floor
from locally and imported wheat in the future.

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6
1.4 The Market

Bakery business in Ethiopia recently experienced rapid growth as the living standard and way of the
people is changed. XYZ CAMPANY wants to establish a large regular customer base, and will
therefore concentrate its business and marketing on local residents, and others which will be the
dominant target market. This will establish a healthy, consistent revenue base to ensure stability of the
business.

1.5 Economic and Social Benefit

The business has the following socio economic benefits:

 Create job opportunities for the surrounding population.

 To introduce modern production methods and deploy highly durable and effective
machineries.
 It increases the government revenue in the form of taxes.
 To provide a sustainable firm steady income for the business owner.

1.6 Financial Considerations

XYZ CAMPANY expects to raise Br 300,000 totally in its own capital, and it anticipates sales of
about Br.496,000 in the first year, Br.505,920 in the second year, Br.526,257 in the third year, Br.
557,726 in the fourth, and Br. 602,344 in the fifth year of the plan. XYZ CAMPANY should break
even by the first of its operation as it steadily increases its sales. The businesses profit and loss
statement indicates that the business is profitable through its business life.Profits for this time period
are expected to be approximately Br.-3,690,000 in year 1, Br. 36,000 by year 2, and Br. 46,000 by
year 3, Br. 65, 000 and Br. 96,000 in the fifth year of its operation. The company does not anticipate
any cash flow problems.

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2 BUSINESS PROFIT

2.1 Objectives

The over all objective of the business is to offer its products at a competitive price to meet the demand
of the middle-to higher-income local market and government and private organizations.

 Provides quality of product to the customers

 Attract the customer or expand with in short period of time

2.2Business Mission

XYZ CAMPANY aims to offer high quality bakery products at a competitive price to meet the demand
of the middle- to higher-income households, school, café and restaurant.

2.3 Business vision

In the future we intend to adapt through marketing and technology to sustain our modern edge to be as
customer-friendly as possible and provide the best products in our field. We also plan to continue to
invest in our community through partnerships with other businesses and nonprofit organizationsand
after five years we would hope to set up similar operation in another area

2.4Core Values:

Service: We work hard to provide an inviting environment for our customers and serve them in the best
and most efficient way possible.
Sustainability: We wish to use technology to connect with the people of the advancing times, working
with our customers to produce their own inspired creations and update as the technology around us
advances.
Community Contribution: We are committed to contributing to organizations in through our products
and funding, and increasing our involvement in other opportunities.

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2.5 Keys to Success

Keys to success for XYZ CAMPANYwill include:

 Providing the highest quality product with personal customer service.

 Competitive pricing.
 Ongoing employee education and recognition programs.
 Give back to the community.

2.6 business ownership

Table 1,The partnership owners and their roles

Nashara Markos Abera Tadele&eyas Worke Mulatu Adisu

&Debebe u
& Tesfaye &ayantu &Tilahun
Manage Casher Auditors Guard Reception baker Operator
ment role
& seller

2.7 Business History

XYZ CAMPANY is start-up business. Financing will come from the partners and loans. The
following table illustrates the company's projected initial start-up costs.

Our start-up costs come to Br383,000which is mostly equipment, store furnishings and construction,
and starting inventory expenses associated with opening our first store.

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 3 SITUATION ANALYSIS

3.1 SWOT Analysis

Strengths
 Bakery would be clean and tidy.
 Highly quality food offering .
 Choice of different menu items not available any where .
 Great retail space that is new clean and located in perfect area .
 Passionate ownerwho believes in giving back to their communityenvironment.
 Sustainable competitive edge of adaptability to all occasions, trends, and
 Consumer market needs.
 Minimal, but experienced staff to start business and save money.
 Financial resources will be used to give back to assist in the nation.

Weaknesses
 First time business venture.
 Lack of brand relation as bakery start up business.
 Limited marketing budget available to create awareness.
 Lack of experience in the bakery.
 Start up costs are only estimates.
 Funding a small business could be difficult.
 Potentially could be understand if our product demand increases drastically.
 Experience in marketing our product is minimal.
Opportunities
 There are low number competitors at the areas.
 New building complexities are being built near by so we can increase our operation.
 Diversifying our operation by opening other operation area .
 Suitability of the areas for trading such materials.
 Join the trend of modern cupcake design.
 To grow quickly and expand, possibly partner with another business.

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 Threats

 Will there be increasing of tax.

 New restaurants are opening up which might out profit margins .
 Will there be inflation.
 Competitors from local restaurants may respond by reducing their price to increase sale .
 The high increment of rent of house.
 Competitors could “steal” our ideas.
 Partnerships may not become available.
 Financial problems could threaten our first year’s success.
 Time management could falter our productivity.
 Potential completion from new entrants.

4 Production plan

XYZ CAMPANY offers a broad range of bread products all from high quality wheat floors. XYZ
CAMPANY caters to all of its customers by providing each customer bread products made to suit the
customer. The bakery provides freshly prepared bakery and pastry products at all times during business
operations.

4.1 Future Products

In the meantime, the company would like to explore the possibilities of floor production from the
local wheat. The company also believes that if floor production is successful,then it could become the
number one endeavor of bakery and flour business.

Currently, there is a defunct flour production facility with lack of all the necessary capital equipment.
Purchase of this facility would allow the owners to begin production and to capitalize on this higher
margin product.

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5 Market plan and Analysis

XYZ CAMPANY is a bakery that sells quality bread and other pastries. We want to target the higher
income of the middle class maintain the quality of our products, but also keep the prices reasonable. We
will strive to make our food something that our customers enjoy, but supply an even greater experience
by incorporating technology.

The government of Ethiopia is now subsidizing bakery business to make competitive in the market by
facilitating credits and by making tax redemption.

XYZ CAMPANY'sfocus is on meeting the demand of a regular local resident customer base, as well
as a significant level of government and private organizations that includes school, hotels, café and
restaurants and others.

Target Market: Our target customers mainly consist of the higher income consumers, and the top of
the middle class. Although this is a smaller group of consumers to appeal to, we hope to position our-
self as a business in the downtown area or along bypass in XYZ CAMPANYbakery where there is
easy access to our selected consumers. We expect our customers to be of the working class, people with
steady jobs, and possibly families.

Product: Our product is a high-quality organic dessert that is extremely adaptable

to both special events, and to the special dietary needs of our customers.

Pricing: Our prices will be slightly higher than those of our local competitors mainly for the reason that
we strive for quality in our products. This goes hand in hand with the market that we plan to target that
of the upper middle class and our higher income consumers.

Place (Distribution): Our primary way of distributing our products would be through our store.
Hopefully in the future we will be able to offer catering services, but during start up we will work out
of our own facilities. Customers will be able to walk in and buy our baked goods, as well as set and/or
send orders by telephone, or through a direct in-store appointment.

Promotion: We hope to contact our customers through advertising in FM radio and in the beginning
use advertisements in the newspaper to introduce our new business. We hope that our idea to sell bread

12
for half price will promote our products, although we want to be known as a bakery that sells our fresh
baked bread and pastries. We also expect that our valued community involvement will also work as a
promotion by improving the public view of our business and advertising to the individuals involved
with the organizations we work with.

5.1 Market Segmentation

Is the process of analyzing and classifying customers in a given market to create smaller, more
precise target markets
XYZ CAMPANY focuses on the middle- and upper-income markets. These market segments consume
the majority of bread products. The market would be segmented based on the quantity purchased both
for households and organizations.
Householder

XYZ CAMPANY wants to establish a large regular customer base. This will establish a healthy,
consistent revenue base to ensure stability of the business. It expects low amount of purchase for a
large amount of households per individual.

Public and private organizations

The company expects high amount of purchase from organizations like café, hotels and restaurants. It
will have its own strategy to satisfy the demand of these large purchasers.

5.2 Target Market Segment Strategy

Is the identification of target markets and determination of marketing mixchoices that focus on those
markets. The dominant target market for XYZ CAMPANY is a regular stream of local residentsand
public and private organizations. Personal and expedient customer service at a competitive price is key
to maintaining the local market share of this target market.

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5.3 Service Business Analysis

The bakery business in Ethiopia has recently experienced rapid growth. Despite low competition in
the immediate area,XYZ CAMPANY will position itself as a bakery where customers can enjoy
breads with best quality and low price with reliable services.

area is somewhat sparse and does not provide nearly the level of product quality and customer service
as XYZ CAMPANY. But some of the competitors have strength and weakness.

5.4 Competition and Buying Patterns

Competition in the local

MANAYEAND HAYISO : They will definitely be two of the major competitors because of its
strong financial position and established marketing and operational practices. However, despite of
they entrenched market position, many customers favor smaller, independent establishments that offer
comfortable atmosphere and good bread at affordable prices.

Weakness

 They bake more bread product; but they do not have large number of customers so the bread did
not complete finish selling. Unsold left bread will prepare for the next period this activities of
selling will make dangerous for customers life due to contamination by bacteria fungus.
 They don’t have good management practice,
 They don’t give back to the community
 They don’t keep the personality of the customer as XYZ CAMPANY

5.5 Strategy and Implementation

XYZ CAMPANY will succeed by offering consumers high quality bakery products with personal
service at a competitive price. The owner’s strategy is to profitably and efficiently utilize present and
future bakery production technology.

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 6 .Human resources Business and its Management plan

Mr. Abeba is the manager of the partnership responsible for the operations and management of the
company. Since the business in the world of limited resources, decision making how to use these
resources in their best possible way is an essential matter.

The business will follow efficient management procedures. The business will be run the day to day
operation by consisting of, skilled, semi-skilled and unskilled workers to be employed by the business
with attractive monthly salary.

Therefore, the management of the business will be competent enough . More specifically, the duties
and responsibilities of the bakery manager will be:

 To prepare rules and regulations that are practical for business administration.

 To check consistently if staffs are functionally employed.

 To prepare the monthly and annual budget, and present to the partners for approval.

 To organize strategies and means to promote sales.

 To be responsible to purchase and sign check when delegated by partners.

 To check the date of sales report.

 To check if tax and liabilities are paid on time.

 To check if the business is profitable, output quality is maintained and prices are with in a
competitive range.

 To check bank loans and other payments are effected on time.

One aim of a manager should be to ensure that all staff understand the nature of the business and are
active in working towards its success.

If it is accepted that most people wish to have the following aspects in their job, the manager can
arrange work to meet these needs:

15
  a reasonable wage.
 security of employment.
 respect for their skills and knowledge.
 good relationships with other staff.
 opportunity to develop new capabilities.
 Reasonable working conditions.

The majority of people wish to have their skills and knowledge recognized and to be able to develop
these further in their work.

6.1 Management Team

Most partners has extensive experience in sales, marketing, finance,accounting ,administration and
management.

6.2 Personnel Plan

As the personnel plan shows, XYZ CAMPANY expects to make significant investments in sales, sales
support, and product development personnel.

Personal Year
Plan
2008 2009 2010 2011 2012
Manager 25,000 25,600 26,600 27,000 28,000
Operators 20,000 20,600 22,000 23,000 24,500
Baristas 15,000 15,000 15,048 17,467 20,364
0 0 0 0 0
Total People 4 4 5 5 6
Total salary Br 60,000 Br 61,200 Br 63,648 Br 67,467 Br 72,864

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 7 Financial analysis

Sales Strategy

Nature and Limitation of Business:

This financial projection is based on sales volume at the levels described in the sales forecast section
and presents, to the best of management's knowledge, the company's expected assets, liabilities,
capital, and revenues and expenses. The projection reflects management's judgment of the expected
conditions and its expected course of action given the hypothetical assumptions. As the table show,
XYZ CAMPANY anticipates sales of about Br.496,000 in the first year, Br. 505,920in the second
year, Br526,157in the third year, Br.557,726 in the fourth, and Br. 602,344in the fifth year of the
plan.

7.1 Financial Plan

There are different major types of bakeries in-store supermarket and small retail. With most revenue
coming from in-store bakeries, our business would draw off these sales. We would specifically target
upper middle class to high-class citizens who are willing to pay a little more for a higher quality
product with more specialization and service than that of major supermarkets. A loan from the bank
will be needed to receive capital for start up costs.The requested long term loan amount 80,000.

7.2 Break-even Analysis

Break even is useful tool in business analysis. The break even point occurs when total revenue is equal
to total cost .XYZ CAMPANY's Break-even Analysis is based on the average of the first-year figures
for total sales by units, and by operating expenses. These are presented as per-unit revenue, per-unit
cost, and fixed costs. These conservative assumptions make for a more accurate estimate of real risk.
XYZ CAMPANYshould break even by the second year of its operation as it steadily increase s its
sales.

The total no of bread sold in the first year:

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 2800+1200+1600+28,000=33,600

Weighted average contiributionmargion =wb1cmb1+wb2cmb2+wb3cmb3+wb4cmb4

2800/33600*50+1200/33600*32+1600/33600*10+28000/33600*1

4.166+1.142+0.4762+0.7778=6.562

BEPquantity=fc/wacm=230,000/6.562=35,050 Breads

Bread 1 2 3 4

No be sold 2920 1252 1670 29,208

Selling 100 80 40 2
price
Sales 292,000 100,000 66,800 58,416

Total sales=517,217 Birr

Table 1: Fixed investment cost estimation

No. Description Unit Quantity Unit Total

price cost
1 Baking Machine No 1 30,000
2 Cash register Machine No 1 15,000
3 Floor mixing Machine No 1 12,000
4 Breading house No 1 15,000
Sub total base cost 72,000
Contingency (4.16%) 3,000
Total 75,000

Table 2: Tools and Equipment

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 No Description Unit Quantity Unit cost Total cost
1 Display Case 3 180 540
B
r
2 Mixer 3 1000 3000
3 Proofer 1 2000 2000
4 Item Ovens 2 2,500 5,000
5 Signs 1 2200 2200
6 Dishwasher 1 2,600 2,600

7 Cookware 1 200 200

8 Cash register 1 300 300

9 Tables/room décor 1 4,000 4000

10 Table 2 2,500 5,000

Sub total 24,300
Contingency (2.85%) 700
Total 25,000

7.3 Sale forecast

Our Sales Forecast shows modest estimates for the first year of operations beginning in May of 2008.
After establishing XYZ CAMPANY'the' place for sweets and celebrations, we project aggressive sales
increases for the following years.

1. Year-
one revenue
expectancy
Bread 1 Bread 2 Bread 3 Bread 4

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Number of units 2,800 1,200 1,600 28,000
sold annually
Average sales Br 100.00 Br 80.00 Br 40.00 Br 2.00
price per unit
Annual revenue Br 280,000 Br 96,000 Br 64,000 Br 56,000
per product
Total year 1 revenue Br496,000
2. Year 1 cost of
goods sold
Bread 1 Bread 2 Bread 3 Bread 4
Expected gross 50.00% 40.00 25.00 50.00
margin per pro % % %
Duct
Annual cost of Br140,000 Br 38,400 Br 16,000 Br 28,000
goods sold per
product
Total year 1 cost of goods sold Br 222,400
3. Annual maintenance, repair, and overhaul
Factor (%) on capital equipment 15%
4. Number of years for straight-line depreciation 5

5. If long-term debt is being used to finance operations, enter the total Br

loan value. 80,000

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 8 Appendix

Table 3: Business Profit and Loss

As the Profit and Loss table shows, XYZ CAMPANY expects to continue its steady growth in
profitability over the next five years of operations.

The income statement (profit and loss statement) shows the revenue, expenses, and net income (or net
loss) for a period of time. Net income is the amount by which total revenue exceeds total expenses.
The resulting profit is added to the partners capitals . A net loss reduces the partners capital account.

BudgtedIncome and loss statement

Year 1 Year 2 Year 3 Year 4 Year 5

Revenue
Gross revenue Br496,000 Br505,920 Br526,157 Br557,726 Br 602,344

Cost of goods sold 222,400 226,848 235,922 250,077 270,083

Gross margin Br273,600 Br279,072 Br 290,235 Br 307,649 Br 332,261

Other revenue Br 0 Br 0 Br 10,000 Br 0 Br 0

[source]

Interest income Br 1,000 Br 0 Br 0 Br 0 Br 0

Total income Br274,600 Br279,072 Br 300,235 Br 307,649 Br 332,261

Operating
expenses

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Sales and Br 40,000 Br 40,800 Br 42,432 Br 44,978 Br 48,576
marketing

Salary 60,000 Br 61,200 Br 63,648 Br 67,467 Br 72,864

Depreciation 40,000 40,800 41,600 42,400 43,200

Insurance 40,000 Br 40,800 Br 42,432 Br 44,978 Br 48,576

Maintenance, 15,000 15,300 15,600 15,900 16,200

repair, and
overhaul

Utilities 30,000 Br 30,600 Br 31,824 Br 33,733 Br 36,432

Property taxes 15,000 Br 15,300 Br 15,912 Br 16,867 Br 18,216

Administrative 20,000 Br 18,360 Br 19,094 Br 20,240 Br 21,859

fees

Other 14,700 Br 4,080 Br 4,243 Br 4,498 Br 4,858

Total operating Br274,700 Br267,240 Br 276,786 Br 291,061 Br 310,782

expenses

Operating income Br -100 Br 11,832 Br 23,449 Br 16,588 Br 21,479

Interest expense on 3,590 2,866 2,106 1,308 470

long-term
debt(interst r x

22
 amount borrowed)

Operating income Br -3,690 Br 8,966 Br 21,344 Br 15,281 Br 21,010

before other
items

Loss (gain) on 0 0 1,000 0 0

sale of assets

0 0 0 0 0
Earnings or net Br -3,690 Br 8,966 Br 22,344 Br 15,281 Br 21,010
income

Table4: Business Cash Flow

The cash flow projection shows that provisions for ongoing expenses are adequate to meet,XYZ
CAMPANYneeds as the business generates cash flow sufficient to support operations.

Cash flow
Year 1 Year 2 Year 3 Year 4 Year 5

Operating activities
Net income Br -3,690 Br 6,276 Br15,641 Br10,697 Br 14,707
Depreciation 40,000 40,800 41,600 42,400 43,200
0 0 0 0 0
Accounts 0 1,000 0 -1,500 0
payable
0 0 0 0 0
0 0 0 0 0

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 0 0 0 0 0
Total Br 36,310 Br48,076 Br57,241 Br51,597 Br 57,907
operating
activities
Investing activities
Br 0 Br 0 Br 0 Br 0 Br 0
0 0 0 0 0
Sale of fixed Br 0 Br 0 (Br1,000) Br 0 Br 0
assets
0 0 0 0 0
Total Br 0 Br 0 (Br1,000) 0 Br 0
investing
activities
Financing activities
Long-term Br 85,522 (Br65,202) Br 9,038 Br 33,240 (Br
debt/financin 92,598)
g
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
Total Br85,522 (Br.65,202 Br 9,038 Br33,240 (Br.
financing ) 92,598)
activities
Cumulative cash flow Br121,83 (Br17,125) Br65,279 Br84,836 (Br.
2 34,691)
Beginning cash balance Br 50,000 Br 81,829 Br164,704 Br229,98 Br
2 314,819
Ending cash balance Br171,83 Br164,704 Br229,982 Br314,81 Br
2 9 280,128

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 Table 5 Balance Sheet

The following is a projected Balance Sheet for XYZ CAMPANY.

Balance Sheet of the business plan for five consecutive years

Assets Initial Year 1 Year 2 Year 3 Year 4 Year 5

balance
Cash and short-term Br 50,000 Br Br Br 229,982 Br314,819 Br 280,128
investments 181,829 164,704
Accounts receivable 3,000 3,000 3,000 3,000 3,000 3,000
Total inventory 25,000 25,000 25,000 25,000 25,000 25,000
0 0 0 0 0 0
Other current assets 5,000 5,000 5,000 5,000 5,000 5,000
Total current Br 83,000 Br Br Br 262,982 Br347,819 Br 313,128
assets 214,829 197,704
Buildings Br Br Br Br 100,000 Br100,000 Br 100,000
100,000 100,000 100,000
Land 100,000 100,000 100,000 100,000 100,000 100,000
0 0 0 0 0 0
Machinery and 100,000 100,000 100,000 100,000 100,000 100,000
equipment
Less: Accumulated 0 40,000 80,800 122,400 164,800 208,000
depreciation expense
Net Br Br Br Br 177,600 Br135,200 Br 92,000
property/equipmen 300,000 260,000 219,200
t

25
 0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
Total assets Br Br Br Br440,582 Br483,019 Br 405,128
383,000 474,829 416,904
Liabilities Initial Year 1 Year 2 Year 3 Year 4 Year 5
balance
Accounts payable Br 2,000 Br 2,000 Br 3,000 Br 3,000 Br 1,500 Br 1,500
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
Other current Br 1000 100 100 100 100 100
liabilities
Total current Br 3000 Br 2,100 Br 3,100 Br 3,100 Br 1,600 Br 1,600
liabilities
Long-term debt Br Br 65,522 Br Br 34,358 Br 17,598 Br 0
from loan payment 80,000 50,320
calculator
Other long-term Br 0 Br 98,800 Br Br 74,900 Br 24,900 Br 49,900
debt 50,900
Total debt Br 83,000 Br Br Br 112,358 Br 44,098 Br 51,500
164,322 104,320
Other liabilities 0 0 0 0 0 0
Total liabilities Br 83,000 Br Br Br 112,358 Br144,098 Br 51,500
164,322 104,320
Equity Initial Year 1 Year 2 Year 3 Year 4 Year 5
balance
Partners capital Br Br Br Br 328,224 Br Br
300,000 296,310 312,584 338,921 353,628
Total liabilities Br Br Br Br 440,582 Br483,019 Br 405,128
and capital 383,000 474,829 416,904

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