HELP WITH QUESTION 4,5,6 ONLY PLEASE
CASE 1 9 STANLEY PRODUCTS CREDIT POLICY Twenty-nine-years old and already the inventor of two patented products, Morgan Stanley has unquestioned technical expertise. Stanley grew up in his dad's sealant business and four years ago, in 1992, decided to start Stanley Products (SP), his own company. A chemistry major, Stanley thoroughly enjoys the research and development side of the business, which he pursues mainly on weekends. It is literally true that SP is Stanley's vocation and avocation. And he has developed a number of products for commercial and home use. He is espe- cially proud of Quick Jel, an adhesive with improved qualities, and NoRust, an unusually effective and easy-to-use rust treatment in aerosol form. SP has something of a regional reputation, and sales reached nearly $1 mil- lion in the most recent fiscal year. At the suggestion of a colleague, Faith Allen, Stanley set up exhibits at a number of trade shows. He was at first reluctant to take the time from the day-to-day operation of the business to do so, but Allen persuasively argued that this was a relatively inexpensive way to gain exposure Good advice, it appears, judging by the expected sales for the next three years. (See Exhibit 2.) 9 Based on advance orders and the unusually large number of product in- quiries, Stanley believes that sales will increase by over 40 percent next year (1997) and will more than double in three years. These forecasts flatter Stanley's scientific side because they imply that users recognize the technical superiority of SP's products. His business side is more cautious, however. Such large growth will undoubtedly require external financing, and Stanley is unsure how best to raise any needed funds, especially since his ability to supply capital is quite limited CASE 1 9 STANLEY PRODUCTS CREDIT POLICY Twenty-nine-years old and already the inventor of two patented products, Morgan Stanley has unquestioned technical expertise. Stanley grew up in his dad's sealant business and four years ago, in 1992, decided to start Stanley Products (SP), his own company. A chemistry major, Stanley thoroughly enjoys the research and development side of the business, which he pursues mainly on weekends. It is literally true that SP is Stanley's vocation and avocation. And he has developed a number of products for commercial and home use. He is espe- cially proud of Quick Jel, an adhesive with improved qualities, and NoRust, an unusually effective and easy-to-use rust treatment in aerosol form. SP has something of a regional reputation, and sales reached nearly $1 mil- lion in the most recent fiscal year. At the suggestion of a colleague, Faith Allen, Stanley set up exhibits at a number of trade shows. He was at first reluctant to take the time from the day-to-day operation of the business to do so, but Allen persuasively argued that this was a relatively inexpensive way to gain exposure Good advice, it appears, judging by the expected sales for the next three years. (See Exhibit 2.) 9 Based on advance orders and the unusually large number of product in- quiries, Stanley believes that sales will increase by over 40 percent next year (1997) and will more than double in three years. These forecasts flatter Stanley's scientific side because they imply that users recognize the technical superiority of SP's products. His business side is more cautious, however. Such large growth will undoubtedly require external financing, and Stanley is unsure how best to raise any needed funds, especially since his ability to supply capital is quite limited
