Prepare a cash flow forecast, Cost Accounting

1.  Prepare a cash flow forecast for the proposal to launch SafeCus in 2010 for a three-year period from 1 January 2010 using the data in the body of the Case Study and discount at a cost of capital of 4% ignoring tax. (This is the "base" for the sensitivity analysis.)

2.  Prepare a Sensitivity Matrix for the project reflecting the two major uncertainties identified by Gordon. To do this you should calculate the impact of the changes in cost of capital between 4% and 10% in increments of 2% and changes of demand as shown in the Appendix.

3.  Comment on Gordon's statement that "as there are no capital allowances tax is not an issue in deciding whether to go forward with the project" and show whether your results are affected by tax.

4.  Show, with calculations, whether your answer to 3 above affects your sensitivity matrix as per task 2.

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