Allonged THE DECISION While Davidson felt enthusiastic about the upcoming possibilities for Magic, he had some concerns about the new level of debt, not just regarding the size of the loan, but also with respect to what that commitment meant for the business in terms of future opportunities. Davidson believed that if new business arose as a result of the increased capacity, the debt repayments could be comfortably met - but the market conditions and the competitive nature of Bunnings concerned him. However, he also realized that if he opted to do nothing, the company's declining revenue trend of the last few years would most likely continue. Should Magic go ahead with the investment in the new machinery? Page 4 9B16N010 EXHIBIT 1: MAGIC REVENUE AND NET PROFIT Actual Revenue and Net Profit for Magic (in dollars): 2009-2015 Revenue Net Profit 2009 800,000 350.000 2010 880,500 400,000 2011 945,000 460,000 2012 865,000 390,000 2013 820.750 365,000 2014 780,000 325.000 2015 730.000 290,000 2019 Revenue Net Profit 2016 2017 680,000 630,000 250,000 190.000 2018 550.000 140,000 Actual and Forecast Revenue, Net Profit, and Minimum Acceptable Profit for Magic: 2009-2018 1000000 900000 800000 700000 600000 or only the course ACCT 7023 Centernal College taught by Norman Ledar from May 05, 2012 10 A Use outside these parameters is a copyright violation 500000 -Revenue 400000 Net Profit Min Profit 300000 200000 100000 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Created by case author based on company files