The source of financing will be P800,000 from each of the five incorporators of the Company, for a total of P4,000,000.
The following are the financial assumptions:
Sales are based on the projected sales under Chapter 2: Marketing Information. The annual increase is 50%.
Depreciation method used is straight-line method. Useful life is 10 years. Property, plant and equipment have no residual value.
VAT is ignored.
Withholding tax on salaries is payable on the following year.
Income Tax rate is 30% payable on the following year.
Salaries increase by 5% every year. Number of employees also increase to cater the growing number of clients.
Operating expenses are paid as they come due. Operating expenses increase by 50% per year to match with the growth in sales.
The lease contract for the office space is for a period of 5 years. The escalation rate is 10% per year.
Permits and licenses are fixed at an estimated amount of P10,000 per year, but reached P15,000 in the first year only due to the payment of one-time/start-up fees.
