Financing analysis:
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.
*note: you need to find P then the amount to borrow so that both lenders have equal borrowing costs.
to 20% afer price. Find the maximum net gadget and determine how this net price impacts the breakeven analysis below. s? 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 $112,500 for the loan regardless of the principle borrowed. A second investor is willing to loan the money under a simple interest payment plan of 2.5% interest but requires the loan be repaid in 6 months. Given that Acme will have to borrow Y dollars, provide Acme with a detailed comparison of the financing options and determine how each impacts the breakeven analysis below. Breakeven analysis (10 marks) The following Cost and Sales projections were captured by the Acme's production and Sales/Marketing teams. Table : Projected costs Gadget Factory Set Utilities Property Salary Salary - Salary - up ($/year) ($/year) Taxes Engineers Hardware Software (S/year) $/FTE technician technician : Financing costs (S/year) el salary Hardwdre Aonang Carrgear /year Factory Ser Pregeth Salary Gadger) Utilities is $89243 10,000,000 50,000 25,000 185.000 7.500.000 50,000 25,000 185,000 12,500,000 50.000 25,000 185.000 S/FTE 150,000 150,000 150,000 Saar sotare S/FTE 120,000 120,000 120,000 TBD TBD TBD B MSRP Net Price Table : Projected sales Gadget Production Target Sales Capacity at SOX (Units/year) production Capacity (Units/year) Target Sales at 75% production Capacity (Units/year) 187,500 112,500 750,000 Target Sales at 100% production Capacity (Units/year) 848 B 499 28 250,000 150,000 1,000,000 250,000 150,000 1,000,000 56,1 125 000 75,000 500,000 449 TBD TBD 425 2.92 TBD 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 a 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 an 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 provides sample calculations so the work can be verified (10 marks) A conclusion that recommends which Gadget to bring to market. . las 060 31/32 315,000 Sva, 500.750.000 to 20% afer price. Find the maximum net gadget and determine how this net price impacts the breakeven analysis below. s? 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 $112,500 for the loan regardless of the principle borrowed. A second investor is willing to loan the money under a simple interest payment plan of 2.5% interest but requires the loan be repaid in 6 months. Given that Acme will have to borrow Y dollars, provide Acme with a detailed comparison of the financing options and determine how each impacts the breakeven analysis below. Breakeven analysis (10 marks) The following Cost and Sales projections were captured by the Acme's production and Sales/Marketing teams. Table : Projected costs Gadget Factory Set Utilities Property Salary Salary - Salary - up ($/year) ($/year) Taxes Engineers Hardware Software (S/year) $/FTE technician technician : Financing costs (S/year) el salary Hardwdre Aonang Carrgear /year Factory Ser Pregeth Salary Gadger) Utilities is $89243 10,000,000 50,000 25,000 185.000 7.500.000 50,000 25,000 185,000 12,500,000 50.000 25,000 185.000 S/FTE 150,000 150,000 150,000 Saar sotare S/FTE 120,000 120,000 120,000 TBD TBD TBD B MSRP Net Price Table : Projected sales Gadget Production Target Sales Capacity at SOX (Units/year) production Capacity (Units/year) Target Sales at 75% production Capacity (Units/year) 187,500 112,500 750,000 Target Sales at 100% production Capacity (Units/year) 848 B 499 28 250,000 150,000 1,000,000 250,000 150,000 1,000,000 56,1 125 000 75,000 500,000 449 TBD TBD 425 2.92 TBD 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 a 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 an 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 provides sample calculations so the work can be verified (10 marks) A conclusion that recommends which Gadget to bring to market. . las 060 31/32 315,000 Sva, 500.750.000
