Performance Lawn Equipment Case: PLE has developed a prototype for a new snow blower for the consumer market. This can exploit the company’s expertise in small gasoline engine technology and also balance seasonal demand cycles in the North American and European markets to provide additional revenues during the winter months. Initially, PLE faces two possible decisions: introduce the product globally at a cost of $850,000 or evaluated it in on North American test market at a cost of $200,000. If it introduces the product globally, PLE might find either a high or low response to the product. Probabilities of these events are estimated to be .6 and .4 respectively.
If actual sales are $1,500,000 in 2009, what would be the forecasted sales for Lockit in 2010? 3. Explain why Larry Husky might prefer Equation 3 to Equation 2. 4. Explain the advantages and disadvantages of using Equation 4 to forecast sales.
* Of the $18400 Rhodes made in mortgage payments last year, $8000 was interest. The income statement lists 2008 interest paid as $32000, which means that there are other debts that required payments of $24000. If possible, accelerating payback on these loans can be very beneficial in the long run. * At industry average levels, wages of a similar business would be approximately $79000, or $11000 lower. * Wages, advertising and rent total %23.1 of sales in the average business, leaving %1.9 of sales for property taxes, interest, utilities, depreciation and other expenses.
Table of Contents Executive Summary 1 Introduction 2 Alternatives Analysis 3 Alternative 1: Introduce a new product. 3 Alternative 2: Increase promotion. 3 Alternative 3: Raise prices and cut costs. 4 Recommendations 5 Appendices: Budgeted Income Statements & the Rate of Growth in Profits 6 Executive Summary Shepard Poles is a company that manufactures and sells specialized poles for the past ten years. Shepard has three different lines: hiking poles, downhill ski poles, and cross-country ski poles.
This leads to less tax paid by the industry and more unemployment insurance payouts, both of which affect fiscal policy. This impact was severe during the financial crisis of 2018, as both Ford and Nissan had to be rescued by government bailouts. These bailouts became necessary to protect the millions of jobs directly and indirectly dependent on the industry. With Chryslers’ return to the capital markets in 2020, taxpayers may get most of their bailout money
Financial Statement Analysis Income statements and balance sheets were reviewed to summarize the following key points that could impact the loan decision. Horizontal, vertical, trend, and ratio analysis were also reviewed to provide a solid understanding of the financial highlights of Custom Snowboards in the areas of profitability, liquidity, and solvency. Revenue. Revenue includes net sales, cost of goods sold, and gross profit. Gross profit continues to grow at 30.4% with .23%/ $4,900 from year 12 to 13, and .93%/ $19,600 from year 13 to 14.
If the sales outlook for the coming three years was only 20,000,000 and B.E. continued producing at the rate of 30,000,000 units, a total of 10,000,000 units would be dumped into ending inventory at the end of each year once again reducing costs of goods sold and falsely increasing income. By the end of year 2013, B.E. Company would have 35,000,000 units sitting in ending inventory taking up space and costing money to store. Once again if the president’s bonus is based off of net income, this situation is the most favorable for a high paying bonus and encourages stockpiling inventory to inflate net income.
Store Sensitivities Even if this store has 18.1% lower sales than the forecasted level by R&P, it can achieve the accepted NPV of prototype, besides, construction cost can increase to near $10 million and still the project can achieve the expected NPV of the P04. If the stores sales decline by 10%, the project’s NPV will decrease by almost $4 millions which provides an accepted NPV of 13,340 K$ which is still above the accepted NPV of P04. Variance to prototype The Store NPV of $17,046K is $7,326K above Prototypical Store NPV. Mainly Cost of Land ($3,675K) and sales (3,603K) followed by positive benefits from real state tax are contributing to this positive variation form P04
Plow stock over the coming Winter. (b) Suppose T-Bills pay 5% return over the Winter. Sketch the capital allocation line, i.e., the line in the standard deviation–expected return space representing all the portfolios achievable by combining the T-bill and the stock in a portfolio. (c) Now suppose you’ve just discovered Professor John Frink, an obscure scientist with a previously unknown, more accurate forecasting technology which allows you to predict that this year’s snowfall will definitely be between 7 and 11 inches. i.
However, C_Fad came out of development and was able to be sold, so a price was set at $35, since it was slightly bigger and a whole unit slower than Cake. C_Fad was created to help appeal to both the low tech and high tech markets, so the price was a compromise for both markets. Marketing budgets were set based on the idea that Cake had been out for 3 years and C_Fad was just getting kick-started. Cake’s Promotions and Sales budget was reduced by $100, down to $1,100, and C_Fad’s Promotions and Sales budget were both set at $1,400. C_Fad was a brand new product appealing to both markets; therefore more money was needed to ensure awareness and accessibility to our customers.