International Research Journal of Applied Finance ISSN 2229 6891 February 2014 Case Study Series Appendix E Full Text of Phase Three Instructions Group Project-Phase Three Due: Phase One and Phase Two form. Artach a clean (unmarked and corrected) copy of your reports to your final phase report. The level of professionalism in the kok of your final submission (including if you have followed all instructions carefully will weigh significantly a cover page for your final group project report. The cover page should grading. show your company's name, your class section, and your group members' names. Identify Calculate the email. 2. the group leader. Please type and do NOT submit your report by total amount of cash you will need to have before the launching day of your business in necessary equipment and machines. to purchase all materials and supplies to buy al needed for the first three months' operations, and to pay your employees' first three months salaries. Assume that your parents have agreed to loan you this amount, interest free. The following is information regarding the cash payment needs for your variable costs and fixed a. Variable Costs and Expe For every variable cost item. you decide to buy sufficient quantity for making the first 2.000 T-shirts. You also want to prepare sufficient amount of cash to pay for the labor costs needed for making, folding, and wrapping the first 2,000Tshirts. Assume that you However, you cannot purchase a fraction can pay your workers for a fraction of an hour. of an ink-jet cartridge or a partial case or ream of paper, b, Fixed Costs and Expenses In addition to covering variable costs for the first 2,000 T-shirts, your initial amount of cash should be sufficient to pay for the first quarter's cash needs for your fixed costs. For your fixed cost items, payments will be made according to the following pattern: (Note: The following cost item labels are according to the cost list of Phase One.) a) Cost items I), 3), and 9) will be paid on a monthly basis. c) The first quarterly party, cost item 10), will be paid at the end ofthe first quarter. d) Cost item 8) will not be paid until the end of the first year of operations. 3. Prepare a cash budget for your company's first year of operations. (NOT the first three months or the first 2,000 T-shirts!) Continue to assume that the selling price is $15 and that 7,800 t-shirts will be made and sold in the first year. Assume all sales are cash sales and that all costs and expenses are paid in cash. Prepare cash budget for the entire year; do not separate the budget into four quarters. Your initial cash balance is the amount you reported in Item 2 above. You decide to keep a cash balance of s20,000 at December 31, 2014 and use the extra cash, if there is, to pay back part of the loan you bomowed from your parents. 4. Calculate the first year' 's estimated "Simple Rate of Return" (ie. accounting rate of return of your business. Use the net income under the absorpti ion costing. For simplicity, use the amount of money you originally borrowed from your parents as the amount of "initial investment" for this calculation. Ching Lih Jan, California State University. East Bay. Diane Satin". Robert Lin, Califoma State Univer ity. Bay, International Research Journal of Applied Finance ISSN 2229 6891 February 2014 Case Study Series Appendix E Full Text of Phase Three Instructions Group Project-Phase Three Due: Phase One and Phase Two form. Artach a clean (unmarked and corrected) copy of your reports to your final phase report. The level of professionalism in the kok of your final submission (including if you have followed all instructions carefully will weigh significantly a cover page for your final group project report. The cover page should grading. show your company's name, your class section, and your group members' names. Identify Calculate the email. 2. the group leader. Please type and do NOT submit your report by total amount of cash you will need to have before the launching day of your business in necessary equipment and machines. to purchase all materials and supplies to buy al needed for the first three months' operations, and to pay your employees' first three months salaries. Assume that your parents have agreed to loan you this amount, interest free. The following is information regarding the cash payment needs for your variable costs and fixed a. Variable Costs and Expe For every variable cost item. you decide to buy sufficient quantity for making the first 2.000 T-shirts. You also want to prepare sufficient amount of cash to pay for the labor costs needed for making, folding, and wrapping the first 2,000Tshirts. Assume that you However, you cannot purchase a fraction can pay your workers for a fraction of an hour. of an ink-jet cartridge or a partial case or ream of paper, b, Fixed Costs and Expenses In addition to covering variable costs for the first 2,000 T-shirts, your initial amount of cash should be sufficient to pay for the first quarter's cash needs for your fixed costs. For your fixed cost items, payments will be made according to the following pattern: (Note: The following cost item labels are according to the cost list of Phase One.) a) Cost items I), 3), and 9) will be paid on a monthly basis. c) The first quarterly party, cost item 10), will be paid at the end ofthe first quarter. d) Cost item 8) will not be paid until the end of the first year of operations. 3. Prepare a cash budget for your company's first year of operations. (NOT the first three months or the first 2,000 T-shirts!) Continue to assume that the selling price is $15 and that 7,800 t-shirts will be made and sold in the first year. Assume all sales are cash sales and that all costs and expenses are paid in cash. Prepare cash budget for the entire year; do not separate the budget into four quarters. Your initial cash balance is the amount you reported in Item 2 above. You decide to keep a cash balance of s20,000 at December 31, 2014 and use the extra cash, if there is, to pay back part of the loan you bomowed from your parents. 4. Calculate the first year' 's estimated "Simple Rate of Return" (ie. accounting rate of return of your business. Use the net income under the absorpti ion costing. For simplicity, use the amount of money you originally borrowed from your parents as the amount of "initial investment" for this calculation. Ching Lih Jan, California State University. East Bay. Diane Satin". Robert Lin, Califoma State Univer ity. Bay