Problems I. Southwest Trading Company, Taos, New Mexico. Summer is approaching ven and Sue Mahan have finally decided that their idea of a successtul furniture, art, and jewelry trading company has come of age. They know and Ste- ern that sum mer is a popular tourist time in New Mexico and could be the best time to start this business. The Mahans have had a long-time interest in Southwestern art and teven graduated from college with an economics degree about 15 years new ago and received his MBA in finance a few years later. He has been working in Dal las, Texas, as the controller of a major wholesale distributor company for many years His wife, Sue, who will be a full partner in the business, spent the first 10 years of her career in retail sales. Over the last several years, she has assumed more administrative duties for the group she works with. Steven and Sue know they bring the expertise and skill to run a succesful busi ness, but to ensure success they have been researching the market for over five years They also know that they must be very careful and thoroughly research the business and industry they are pursuing. They have traveled extensively to New Mexico and have spent a good deal of They have found that there is time getting to kno and elsewhere in the Southwest, and prices are high. Through their contacts with the local craftspeople, they have found that many of them would like a reliable source for displaying and selling their goods. They have been able to, make tentative arrangements with a large and dependable group to supply the furniture and art pieces they will need to run the business. The Mahans have decided to open a shop called Southwest Trading Company in Taos, New Mexico, and act as both a retailer and a supplier to furniture and art out lets in Texas. Steven's extensive contacts with businesses in Dallas and Houston have given him the orders needed to make the business a success as soon as they begin shipping the goods. Sue has already begun marketing the Southwest Trading Com arrangements wI people will allow very aggressive pricing of the goods to retail establishments in Texas. This aggressive pricing has been well received, and tentative orders are already Steven has found an ideal location in Taos that is currently available. The owner is asking $275,000 for the space, but Southwest Trading has a contract, contingent on financing, for $250,000. Steven and Sue have gotten bids on remodeling and should in place. be able to renovate the space for about $45.000. Although they will purchase the building, the land is leased on a transferable lease with 65 years remaining. The into the venture. Sue's sister is also interested in the possibilities that the com exhibits and is lending Southwest Trading $90,000. Repayment on the note to Sue's Mahan's have decided to invest $235,000, which represents most of their saving pany