You would like to launch a new company called GreenDrive for a new product. The product is a compact car that is powered by household garbage instead of fueled by electricity or gasoline. The range of the new compact car is 200km on each tank of household garbage. You have already obtained a patent for the new product, including the engine. For the new company you will develop a business plan which includes detailed information on:
- How much financing is needed and how you plan to secure financing based on your valuation of the business (i.e. using a discounted cash flow valuation – NPV)
- Assume: r= 6.2%; g= 3.5% for years 3 and beyond
- Assume: you have $2,100,000, you will need to raise any required funds >$400,000
- An efficient capital structure given the resources and constraints imposed on the company.
- Determine a cost of capital and apply capital budgeting techniques.
Please see the attached excel file or the Google Sheets link below for the Cash Flow Statement, Income Statement, and Balance Sheet (some numbers are missing because those depend on the plan for financing and capital budgeting, such as long-term debt and cash flow from financing. You may fill them in if needed).