In January 2002 Emanuele & Lollo Co undertakes a four-year project at a contracted price of EUR 100 million that will be billed in four equal annual instalments of EUR 25 million each year over the project's life. The project is expected to cost EUR 90 million. Over the life of the project, the billings, cash receipts and cash outlays related to the project are:
|
Amounts in thousands of euro
|
2002
|
2003
|
2004
|
2005
|
|
Billings
|
25,000
|
25,000
|
25,000
|
25,000
|
|
Cash received
|
20,000
|
27,000
|
25,000
|
28,000
|
|
Cash paid
|
18,000
|
36,000
|
27,000
|
9,000
|
(a) Show the cash flows from the project each year.
(b) Prepare the income statement for each year.
(c) Prepare the balance sheet at the end of each year.
(d) Calculate some key financial ratios.