FINANCIALS OF NEW SOFT DRINK

Financials of New Soft Drink

Financials of New Soft Drink

Introduction

The name of our New Energy drink would Tera-Drink. This is the soft drink, which would revolutionize the market of energy drinks. This is a Soft drink, which would be a good substitute in the market, for the energy drink lovers. The side effect of the drink is almost nil and it is a real treat for the youth of the country. As we know that, the product itself is nothing unless finances are not there to fund the project. Therefore, to bring this bottle in the market we would need the help of a venture capitalist, Angel investor or any friend of us, who can fund our project (Bragg, 2000, Pp 32 - 42). Thus, we are going to do a forecasting of the project, to find out the cost and returns of the project.

We have set the price of the soft drink at $ 2, which we plan to sell at the same price throughout the year. Later on, we may increase the price of the soft drink to $ 2.5. We are not increasing the price of the soft drink in the first year because we want to attract more and more customers while at the same time retaining the old customers. Thus, price increase in the first year is not seen because of the energy drink price just hovering above our price. Our overall sales are quite handsome that is around 45000 thousand units out of the total produce of 46000 units (Chuck, 2005, pp. 442). We will be using the FIFO method, so we do not expect that our old stock will last long, since it will be constantly replaced by the new stock. So, every time a fresh product will be supplied in the market with the same taste and quality. Thus, we want to tell our potential investor that the prospects in the company are high which can be seen from the following figure.

Discussion

Management Competencies and Product Likeness

We want to tell our potential investor that we are qualified professionals, who have the management skills as well the best product to sell in the market (Shepherd, 2003, pp. 411). This can be seen by the management competencies we have shown in our last project and as far as the product, likeness is concerned. The recent sample distribution at various malls proved a success as most of the respondent answered in favor of the product (Ruggeri, 1999, pp. 41).

NPV of the Project

The project as according to our projection will be giving a healthy cash flow over its lifetime (CorbaciogÌŒlu, 2005, Pp 63 - 78). Although we kept the sales projection, selling price and cost of the good constant. Yet we were able to see a healthy cash flow over the one-year period. After one year when the planned rise in selling price of the product is concerned we expect that the cash flows will increase ...