BUS 400 6-3

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Southern New Hampshire University *

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400

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Business

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Jun 26, 2024

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docx

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BUS 400 Module Six Assignment Template 24-Month Pro Forma Insert the appropriate values in each row. Previous Fiscal Year 24-Month Projections Sales $44,538,000,000 $47,507,200,000 Cost of goods sold $24,576,000,000 $26,804,800,000 Gross profit $19,962,000,000 $21,702,400,000 Selling expenses $3,114,000,000 $3,145,140,000 Administrative expenses $9,911,000,000 $10,902,100,000 Total operating expense $13,025,000,000 $14,047,240,000 Income from operations $6,937,000,000 $7,630,700,000 Other income $34,000,000 $37,400,000 Income before tax and interest $262,000,000 $288,200,000 Other expense (interest) $14,000,000 $15,400,000 Income before income tax $6,661,000,000 $7,327,100,000 Income tax expense $934,000,000 $1,027,400,000 Net income $5,727,000,000 $6,299,700,000 Explanation of Assumptions For the calculations of our 24-month projections, I ended up increasing our sales and COGS by 5% over the 24 month period. This decision was based on conservation and not wanting to overestimate the value of this new product line. The increase in sales at 5% I used in the calculation which would price each set of headphones at $200 each. I also estimated that we’d sale $2,969,200,200 worth of headphones over that 24-month period. Since this is a new product line being launched I cannot say for sure how well our consumers will take to this product and the actual sales that will take place. To account for this, I figured that the 5% increase in sales would be a good amount to increase by. For the other calculations I increased those by 10% over the 24-month period, which would mean that there would be a 5% per year increase. I did this because I expect an increase in both taxes and expenses. I also considered other things into my calculations such as the hiring of a new, diversified and qualified team as well as the costs for materials. In conclusion, there is an overall increase in net income, so I believe that this stands as an accurate representation of the calculations of our 24 month projections for this new product launch for the Nike company.
References Net, S. A. (2021, Oct 10). Nike Income Statement. Retrieved from stockanalysisonnet.com: https://www.stock-analysis-on.net/NYSE/Company/Nike-Inc/Financial-Statement/Income- Statement
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