Cost-Volume-Profit Analysis
In this assignment, you will apply the concepts of CVP analysis learned in yourModule 4. You will use CVP analysis to analyze a project of your choice to enable a prospective investor to decide if your project is worth investing in.
Assignment Overview:
Select a project, whether from work, an avocation, an entrepreneurial idea of your own, or your child's lemonade stand on the corner. Identify the various costs required to execute the project and consider the revenue the project will generate. In a Power Point format, create a basic pro forma statement necessary to convince someone to provide the start-up costs of the project.
Assignment Tasks:
To create a pro forma statement:
1. Identify and list the various costs-fixed and variable, direct and indirect-required to execute the project.
2. Calculate the break-even point for the project and the expected financial returns. Click here to access the CVP template to calculate the break-even point. Make sure you show your Excel formulas or provide calculations so your instructor can review your work. Save your final calculations as M4_A1_Cost-Volume-Profit_Template_Lastname_Firstname.xls. The completed template must accompany the PPT.
3. Include a brief discussion of key points of any intangible benefits or costs associated with the project.
4. Supplement your pro forma statement with sufficient background information to enable a prospective investor to decide if your company is worth investing in.
• The detail must have enough historic data to give an investor an understanding of trends.
• You should also have sufficient written background so that a potential investor understands the business. Use the speaker notes area of your presentation to add background information that you would communicate verbally in a presentation. This should be 1 to 2 pages in length.