Financing analysis (10 marks):
in order to launch the new gadget line, ACME is securing investor financing to cover the first year of fixes costs from private investors. a foest lrivate investor is willing to loan ACME the funds needed to cover the fixed costs associated with producing the chosen gadget to be paid back over 12 equal monthly payments, with a fixed cost of borrowing of $112,500; that is, the lender will charge a fixed dollar amount of $112,500 for the loan regardless of the principle borrowed.
A second investor is willing to loan the money under a simple interest payment plan of 2.5% interest but requires the loan to be repaid in 6 months. Given thay ACME will have to borrow Y dollars, provide ACME with a detailed comparison of the financing options and determine how each impacts the breakeven analysis below.
*annual interest needs to be converted to half year rate, payoff at the midpoint of the year.
*principal is variable, unknown, need to solve it to see at what value the two options are equal in terms of borrowing cost. then what happens if above/below this amount.
still allowing price for each gadget and determine how this net price impacts the breakeven analysis below. afer Financing Analysis (10 marks) In order to launch the new gadget line, Acme is securing investor financing to cover the first year of fixed costs from private investors. A first private investor is willing to loan Acme the funds needed to cover the fixed costs associated with producing the chosen gadget to be paid back over 12 equal monthly payments, with a fixed cost of borrowing of $112,500; that is, the lender will charge a fixed dollar amount of $112,500 for the loan regardless of the principle borrowed. A second investor is willing to loan the money under a simple interest payment plan of 2.5% interest but requires the loan be repaid in 6 months. Given that Acme will have to borrow Y dollars, provide Acme with a detailed comparison of the financing options and determine how each impacts the breakeven analysis below. Breakeven analysis (10 marks) The following Cost and Sales projections were captured by the Acme's production and Sales/Marketing teams. Table : Projected costs Gadget Factory Set Utilities Property Salary - Salary - Salary - Financing up ($/year) ($/year) Taxes Engineers Hardware Software costs ($/year) $/FTE technician technician ($/year) arrean Preth saian salamare Paano othare Cear oso, 25.000 50,000 50.000 50.000 185.000 185.000 150.000 150,000 150,000 120,000 120,000 120.000 TBD TBD TBD 7.500.000 E300.000 25.000 MSRP Net Price at 100 Table : Projected sales Gadget Production Target Sales Capacity SON Units/year) production Capacity (Units/year) Target Target Sales Sales at 75% production production Capacity Capacity [Units/year) Unitsyear 187,500 250,000 112.500 150,000 750,000 1.000.000 250 000 150,000 1,000,000 125000 75.000 500,000 449 TBD 499 1 TBD 425.92 TRD 8- 87,500 5,139500 58 50.000 454,00.000 c Run a break-even analysis using the information captured in projected costs and revenues tables and any relevant information from your production, pricing and financing analyses. Report Once you've completed your analyses, you'll need to detail your findings in a report . Your report should include: . An introduction that provides an overview of why the report was requisitioned and explaining why each analysis is conducted, A Production analysis that provides an overview of how the analysis was conducted and provides sample calculations so the work can be verified (5 marks) A Pricing Analysis that provides an overview of how the analysis was conducted and provides sample calculations so the work can be verified (5 marks) A Funding analysis that provides an overview of how the analysis was conducted and provides sample calculations so the work can be verified (10 marks) A Break-even analysis that provides an overview of how the analysis was conducted and provides sample calculations so the work can be verified (10 marks) A conclusion that recommends which Gadget to bring to market. Alas 000 Y: 395,000 $4,500.750,000 . still allowing price for each gadget and determine how this net price impacts the breakeven analysis below. afer Financing Analysis (10 marks) In order to launch the new gadget line, Acme is securing investor financing to cover the first year of fixed costs from private investors. A first private investor is willing to loan Acme the funds needed to cover the fixed costs associated with producing the chosen gadget to be paid back over 12 equal monthly payments, with a fixed cost of borrowing of $112,500; that is, the lender will charge a fixed dollar amount of $112,500 for the loan regardless of the principle borrowed. A second investor is willing to loan the money under a simple interest payment plan of 2.5% interest but requires the loan be repaid in 6 months. Given that Acme will have to borrow Y dollars, provide Acme with a detailed comparison of the financing options and determine how each impacts the breakeven analysis below. Breakeven analysis (10 marks) The following Cost and Sales projections were captured by the Acme's production and Sales/Marketing teams. Table : Projected costs Gadget Factory Set Utilities Property Salary - Salary - Salary - Financing up ($/year) ($/year) Taxes Engineers Hardware Software costs ($/year) $/FTE technician technician ($/year) arrean Preth saian salamare Paano othare Cear oso, 25.000 50,000 50.000 50.000 185.000 185.000 150.000 150,000 150,000 120,000 120,000 120.000 TBD TBD TBD 7.500.000 E300.000 25.000 MSRP Net Price at 100 Table : Projected sales Gadget Production Target Sales Capacity SON Units/year) production Capacity (Units/year) Target Target Sales Sales at 75% production production Capacity Capacity [Units/year) Unitsyear 187,500 250,000 112.500 150,000 750,000 1.000.000 250 000 150,000 1,000,000 125000 75.000 500,000 449 TBD 499 1 TBD 425.92 TRD 8- 87,500 5,139500 58 50.000 454,00.000 c Run a break-even analysis using the information captured in projected costs and revenues tables and any relevant information from your production, pricing and financing analyses. Report Once you've completed your analyses, you'll need to detail your findings in a report . Your report should include: . An introduction that provides an overview of why the report was requisitioned and explaining why each analysis is conducted, A Production analysis that provides an overview of how the analysis was conducted and provides sample calculations so the work can be verified (5 marks) A Pricing Analysis that provides an overview of how the analysis was conducted and provides sample calculations so the work can be verified (5 marks) A Funding analysis that provides an overview of how the analysis was conducted and provides sample calculations so the work can be verified (10 marks) A Break-even analysis that provides an overview of how the analysis was conducted and provides sample calculations so the work can be verified (10 marks) A conclusion that recommends which Gadget to bring to market. Alas 000 Y: 395,000 $4,500.750,000
