Chapter 5 Exercise 3 Mary is 13 years old and she wants to start her own business, FashionBeads, by selling bracelets through one of the largest arts and crafts online platforms, Crafts-tastic. FashionBeads will only be open for 3 months, from October 1st to December 31, the holiday season. Mary enlists all the women in her family to contribute their unwanted beaded necklaces, bracelets and earrings which Mary de-constructs to re-use the beads, making new FashionBeads bracelets for sale. The key elements of Mary's strategic plan are: . Grace sets up the online store account for Mary. Crafts-tastic charges $5 listing fee per month on the 1" of the month, a $1 fee for every bracelet sold, and $2 per bracelet for shipping costs. Mary estimates she will sell 20 bracelets in October, 30 bracelets in November and 50 bracelets in December. The price of each bracelet is $20. Mary decides not to pay for Crafts-tastic's advertising service, since she has seen that the sponsored products are normally for crafts that are very different from the bracelets she sells. Simplifying assumptions: . . . The Crafts-tastic account for Fashion Beads will be closed on December 31st, right before they charge the online store fee for January. Mary's cost of equity capital is zero, and therefore the time value of money may be ignored, which means that FashionBeads' company value is just the sum of the profits (no discounting needed). FashionBeads is tax-exempt (tax rate = 0%) In the chart on the following page, fill in the baseline assumptions and record your calculation of FashionBeads' baseline company value.. 37