Question
Fast Feet is a new specialty running shoe store in Lumberton, NC. Fast Feet started off with a very good first year, as it made
Fast Feet is a new specialty running shoe store in Lumberton, NC. Fast Feet started off with a very good first year, as it made a profit. 2022 is not looking as good, however, as increased supply prices and utilities have driven up the COGS and a decrease in store traffic has sales numbers down considerably from 2021. Fast Feet does not have much of a seasonal swing, and with the store being new, there is no long-term data by which forecasting can be done. However, sales are currently averaging $142,867.08 per month through May 31, 2022. In that same time, the COGS has been $171,212.42. Obviously, Fast Feet cannot continue this same course the rest of the year. You have been contracted at a cost of $10,000 (administrative costs) to provide an analysis of what Fast Feet should do. The owner has asked that you provide these scenarios:
Project the Income Statement, Balance Sheet, and Statement of Cash Flows for 2022, should Fast Feet take on a marketing campaign that should increase sales, from the first five-month average for 2022, by 21%. The campaign will cost Fast Feet $3,000 spread out over the last seven months of the year.
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