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im having trouble sloving these problems. can someone please help me solve this Instructions: This exam will take you through the steps of running a

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Instructions: This exam will take you through the steps of running a fictional athletic apparel company named SELUxe (get it?). SELUxe is being founded based upon a new foam technology that you accidentally discovered while you were trying to cook your ramen noodles. You have a simple logo design and have thoughts of expanding more into the future, but to start, you want to focus your business on selling a shoe using the new foam. Q). You know that you need $100,000 in start-up capital to get this company of the ground. You have essentially zero money saved up (which is why you were eating ramen) so you need to find external sources for all of this. One of your classmates and best friends is on the school softball team has made some solid money in the NIL landscape, but is far from "set for life" financially. Your friend is interested in helping you out, but knows very little about business, how would you counsel her in terms of whether she should lend you the $100,000 or use it to buy-in as a partner? Remember this is your friend, so you need to balance your concern for her financial security with your desire to run a successful business. would tell her to buy. in as a partner. 2. Your friend is still on the fence, but seems to understand business much better now (she took Sabin's class). She asked you to crunch some rough numbers as to how much revenue you can expect to bring in. Using these projections, what can you feasibly tell her is your expected revenue in year 1? We cypected pevenuet beorl is lel, soo. 3. Your wants to see projections if you were more aggressive with the price of the shoe and sell it for 50% more than the initial estimated price. She also wants to know what projections would look like if you bargain priced your shoe at 50% lower than your initial price. You come up with the following projections. Thoroughly analyze each projection and make a conclusion as to which one is the better course of action. Assume after your projections that you have decided to sell the SELUxe shoe for $300. Also assume that your friend, flush with NIL cash, is willing to give you the loan for the full $100k and will only charge you 10% simple interest if you are able to pay off the loan in one year. If you fail to pay it off in one year, she takes full ownership of the company. After crunching the numbers on labor costs, raw materials, shipping, equipment rental, and manufacturing space you figure that each pair of SELUxe will cost an average of $133 to produce in year 1 (it will likely go down once you have established relationships and have achieved scale in future years). How many pairs of shoes will you need to sell in order to pay back your friend in year 1 and keep the company? Analyze the likelihood of success under this plan. What would you change in order to improve your odds of turning a profit in year 1 ? (Keep in mind that you have not budgeted for any marketing expenses or paying yourself a salary). you 1ould have to sell 828 parrs of Shoes to Pau your 5. Assume your friend is now thinking that she would prefer to buy in as a 50% partner and wants to know what the Net Present Value of her investment is. Your projections show that the company will break even in year 1 , turn a profit of $10,000 in year two, profit $50,000 in year three, and then profit $100,000 in years four and five. What are the incremental cash flows vour friond can nmitave in wawe n es Your friend wants to know when she will be paid back. Without the benefit of time to do a full TVM calculation, what do you tell her? It wertd tell her thed ohe why get paid back in ypor 4 . She has more questions about the Net Present Value of her investment. How does she know if the NPV is good? -f Its ene cend over. What should her discount rate be? What factors should she consider when making it? If she feels this company and the projections are pretty risky, should she move her discount rate up or down? If she decides to move her discount rate lower, what effect does that have on her NPV? You and your friend feel good about moving forward with the business, now you must figure out what type of organization you will be. Briefly discuss what your options are for this company (including a brief discussion on why certain entity types would not be options), and weigh the pros and cons of each. Fully explain which entity structure you would use for SELUxe and why

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