#5. You have a monthly line of credit with the local bank. Please forecast the maximum line of credit you will need available, and what month that will be if: Sale price per unit is $28/unit and is immediately available for your use (cash) Inventory carrying cost is 25% of average 12 month forecasted inventory worth, charged monthly. The Raw material is $10/unit The profit on umbrella sales is $5/unit (the owner takes that cash out of the business each month). The plants conversion cost is $3.85/unit (includes your salary, your worker's salaries, healthcare, vacation, plant heat/air, plant electric, plant water/sewer, taxes, insur, and other miscellaneous manufacturing cost etc. The plants scrap & return scrap cost is $15/unit (Raw + Conversion) The manufacturing rework cost is $2/unit The business return and rework cost is $10/unit (you pay customers shipping) Sales returns are immediately refunded full sales price Cost of rework is paid the month it comes out of the process (workers pre-paid monthly) Bank loans are immediately payable when excess cash exist (no interest rate being charged)

#6. What month will you have the most money tied up in inventory?

#7. Would you want this business based on its ROI (Return/Investment)? Income, Losses, Investment.

#8. What are four ways you could improve this business if sale price cannot be raised.?