Accounting Assignment Example | Topics and Well Written Essays - 1250 words

Accounting - Assignment Example It is his intention to obtain funds from bank to procure the fixed assets required for production of the product. The start-up costs for Personal Fitness Equipment Inc. are estimated at $1,50,000. All start-up assumptions are based on an actual infusion of $50,000 in the form of capital to be introduced by Dr.John. The balance amount of $ 1,00,000 is proposed to be brought in through Bank Finance at the interest rate of 3%. Certain portion of the funds will be utilized to procure raw materials to fund production of initial inventory. A company office would be located at the Atlanta market area. Available office space has been located in Atlanta. This office space is small and may be secured at nominal cost. As needs dictate office and/or distribution facilities will be expanded. Initially, the small office will serve to manage marketing functions and sales/order processing. Personal Fitness Equipment Inc, is in the business of manufacturing Fitness equipments for personal use. The promoter has come up with a unique design of Personal Fitness Equipment (PFE). This equipment is easy to use and is being priced at a cheaper rate. The main feature of this equipment is the safety standards and the wide range of exercises that can be performed with this equipment. The equipment is proposed to be made with metal of ideal weight. This product designed by Dr. John can be produced at low cost, is lightweight, independent tests have been performed at university and Local Gyms. The users have given positive feedback that the regularity of their physical exercise has increased after purchasing this product. The Appendix section has all the relevant Financial Projections. The sales forecast for the first year of operation is estimated at USD 500000. The company is expected to earn Gross profit at the rate of 54% of the turnover. The net profit of the company is estimated at USD 113770, which workout to about 23% of the turnover.