Jonathan and Emily Berry grew up watching their grandmother make the best chocolates at Christmas using an old family recipe. They had a vision that they could mass-market these chocolates, expecting them to be especially popular during Easter and the holiday season. They created a new company, Delicious Chocolates Inc., and the next step was to secure funding. Before approaching their bank, they have asked you to determine the feasibility of their new venture. They would like to you to prepare a report that considers both quantitative and qualitative analysis. In the report they would like to see a break-even analysis and any other analysis you deem important to aid in their decision to proceed to the next step, which is to secure start-up funding.

Brook Sorenson, the owner of a nine-hole golf course on the outskirts of Ottawa, Ontario, is considering the proposal that the course be illuminated and operated at Management is studying whether to close the Wallpaper department because of the changing market and accompanying loss. If the Wallpaper department is dropped the following changeJonathan and Emily Berry grew up watching their grandmother make the best chocolates at Christmas using an old family recipe. They had a vision that they could mass-market these chocolates, expecting them to be especially popular during Easter and the holiday season. They created a new company, Delicious Chocolates Inc., and the next step was to secure funding. Before approaching their bank, they have asked you to determine the feasibility of their new venture. They would like to you to prepare a report that considers both quantitative and qualitative analysis. In the report they would like to see a break-even analysis and any other analysis you deem important to aid in their decision to proceed to the next step, which is to secure start-up funding. s are expected to occur:

• The space vacated by the Wallpaper department can be remodeled at a cost of $12,400 and will be devoted to an expanded line of high-end carpet.

• Sales of carpet is expected to increase by $120,000 with the introduction of the high-end carpet the carpet divisions overall contribution margin ratio will increase by five (5) percent points.

• Irvine will increase advertising expenses by $25,000 to promote its new line of high-end stereo equipment.

• Irvine can cut the Wallpaper departments fixed costs by 40 percent. Remaining

Appendix A

1. It is estimated that the worldwide consumer market for chocolate is $200 million annually.

2. Delicious Chocolates Inc. believes it has a premium chocolate recipe and market research conducted on their behalf has suggested that they could obtain between 0.5% and 2% of the worldwide chocolate market. The market research also indicated that Delicious Chocolate could expect the following probabilities of worldwide market share:

1. 0.5% of worldwide market share @ a 15% probability

2. 1% of worldwide market share @ a 60% probability

3. 2% of worldwide market share @ a 25% probability

3. Delicious plans to sell each box of chocolates at $20.00 to retailers.

4. Direct materials are expected to be $4 per box and direct labour $2 per box. The packaging of the chocolates is expected to cost $3.00 per box.

5. Delicious Chocolates will incur fixed expenses of $1,000,000 annually. This includes rent for a warehouse and a fixed distribution fee to retailers.

6. Delicious Chocolates will not be tax exempt. It has a tax rate of 30% of pre-tax profit. Delicious Chocolates has an after-tax target profit of $200,000

• The space vacated by the Wallpaper department can be remodeled at a cost of $12,400 and will be devoted to an expanded line of high-end carpet.

• Sales of carpet is expected to increase by $120,000 with the introduction of the high-end carpet the carpet divisions overall contribution margin ratio will increase by five (5) percent points.

• Irvine will increase advertising expenses by $25,000 to promote its new line of high-end stereo equipment.

• Irvine can cut the Wallpaper departments fixed costs by 40 percent. Remaining

Required:

Prepare a report that considers both quantitative and qualitative analysis that will assist Delicious Chocolates as they see funding for this initiative.

Brook Sorenson, the owner of a nine-hole golf course on the outskirts of Ottawa, Ontario, is considering the proposal that the course be illuminated and operated at Management is studying whether to close the Wallpaper department because of the changing market and accompanying loss. If the Wallpaper department is dropped the following changeJonathan and Emily Berry grew up watching their grandmother make the best chocolates at Christmas using an old family recipe. They had a vision that they could mass-market these chocolates, expecting them to be especially popular during Easter and the holiday season. They created a new company, Delicious Chocolates Inc., and the next step was to secure funding. Before approaching their bank, they have asked you to determine the feasibility of their new venture. They would like to you to prepare a report that considers both quantitative and qualitative analysis. In the report they would like to see a break-even analysis and any other analysis you deem important to aid in their decision to proceed to the next step, which is to secure start-up funding. s are expected to occur:

• The space vacated by the Wallpaper department can be remodeled at a cost of $12,400 and will be devoted to an expanded line of high-end carpet.

• Sales of carpet is expected to increase by $120,000 with the introduction of the high-end carpet the carpet divisions overall contribution margin ratio will increase by five (5) percent points.

• Irvine will increase advertising expenses by $25,000 to promote its new line of high-end stereo equipment.

• Irvine can cut the Wallpaper departments fixed costs by 40 percent. Remaining