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him. Any insight about his projected numbers is greatly appreciated. He is especially interested in a few ratios which will help him with important decisions
him. Any insight about his projected numbers is greatly appreciated. He is especially interested in a few ratios which will help him with important decisions him run a better business- he has asked for specific scenarios and explanations. Hunter also wants feedback on his plan to use a combination of debt and equity financing. What is an optimal financing mix for a business like his? What specifically should he know about such a decision? Are there any benefits and drawbacks of using equity? What about debt? If the business does well, Hunter might consider buying a $30,000 machine which would cut the labor cost of a laptop repair to only $15. The machine can repair an estimated 1,500 laptops before it needs to be replaced. After doing some rough math he is not really confident in, Hunter is wondering if he should buy the machine now instead of waiting. He is also not sure how the machine will be depreciated- he wants you to advise him on the best depreciation method for this situation and how the information will be presented on the income statement and balance sheet. Finally, Hunter highly values the local indigenous community and wants to help its members, especially children. He is thinking about gathering volunteer help to produce fifty laptops to sell to a local school at cost (in future, he hopes to donate them for free). Hunter wants you to explain, in detail, how costs can be tracked for these fifty laptops, assuming some specialized workers such as supervisors are paid hourly. He also wants you to take into consideration assembly line worker costs (assuming he can't find enough volunteers), utilities costs, etc. Be sure to give Hunter an idea about the necessary journal entries and other important elements. Hunter acknowledges that he has gone through a real struggle in his life but is dedicated to turning things around with an ethical, well-run laptop retail and repair business. In a business memo drafted by yourself (and not anyone else nor artificial intelligence) to him, give Hunter detailed advice on all issues raised in the case. Feel free to add general business or life advice which may benefit Hunter
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