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Daniel Jacob has just graduated with a business degree from SUSS. He is considering whether to seek employment or to run his own small business.
Daniel Jacob has just graduated with a business degree from SUSS. He is considering whether to seek employment or to run his own small business. Based on current job market conditions, he is confident of getting a job that will pay him at least $3,000 a month. On the other hand, he is al so keen to be his own boss. As a fitness enthusiast, he has been able to source for a digital fitness watch at a cost of only $13. He expects to be able to re-sell the watch profitably. After some research, he est imat es that he will be able to sell 500 such watches per month online at a price of $25 each. His fixed monthly business expenses work out to be $3,500. His income will be based on the net profit of the business. (a) Employ a model to help Daniel analyse this fitness watch business. Should he attempt to start this business? Why? (10 marks) (b) Further research indicated that the monthly demand could increase to 1,500 if the price is lowered to $18. Comment on whether your recommendation will change if Daniel now sells the watch at $20 each? Justify your answer quantitatively. Note: the new price is $20 not $18 ) (10 marks) Presentation Your models for Q2 must be neatly laid out and pre sented. You must apply appropriate colours, alignment, labels and formatting of numbers. Documentation is required
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