Provide a letter of advice to the client with the following key points based on the information provided:

- Why it is a good project to analyse

- Discuss the key results from the prepared budgeted income statement and cash budget

- Make one suggestion on how the client could improve the financial success with this project

- Identify and discuss one non-financial factor that might affect the clients decision to proceed with this project

- Clearly state whether the client should proceed with this project and why

Mr. James Hunter and Dr. Olivia Ng (Optometrist) are business partners who have approached your firm looking for business advice. Given the current global COVID-19 pandemic, business has been slow and so the clients would like to take this opportunity and take their business to the next level. Their business is an optometry business trading under the name i-Optometry. The business is a brick-and-mortar store located in Burwood and retails eyewear, that is, sunglasses and prescription glasses. They also provide optometry services to customers in the form of comprehensive eye-tests. As part of their business operations, i-Optometry retails the following types of eyewear: Sunglasses retail for $200 each. It costs $60 each and the business purchases them from a local supplier. Prescription glasses retail for $150 each. It costs $80 each to buy them from the same local supplier who provides the sunglasses. i-Optometry also provide comprehensive eye-tests to customers who wish to assess eye health. The selling price of one comprehensive eye-test is $75.

BUDGETED INCOME STATEMENT Jan-211 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 TOTAL 50.650.01 Sale Value Cost Of Sale Gross Profit 51,150.0 18,880.0 32,270.00 53,850.00 19,900.0 33.950.0 49,600,00 18,800.00 30.800.0 49,800.0 18,440.0 31,360.0 49,450.0 18,720.01 30.730.01 71,150.0 27,820.0 43.330.01 69,100.0 26,960.0 42.140.0 59,650.0 22,900.0 36.750.0 45,550,0 17,580.0 27,970.0 19,500.00 60,550,0 24,080.0 36.470.01 60,550.0 671,050.0 25,420.0 259,000.0 35,130.0 412.050.0 31,150.0 Other Income: 6,900.00 7.275.0 7,650.00 6,825.0 7,575.0 12,600.0 12,150.0 9,750.0 8,775.0 8,400.0 11,550.00 12,000.0 111,450.00 HERRER *** Operating Expenses: Selling Expenses: Wages To Sales Assistant ........................................... Wages To Office Staff Marketing Expenses Insurance Expenses General Council - Office Rent - Office Water, Gas, Electricity Expenses - Office Office Supplies *** :.................................................. 8,000.0 4,500.00 75.0 250.0 33.0 1,280.0 42.5 90.0 8,000.0 4.500.01 75.0 250.0 33.0 1,280.0 42.5 90.0 8,000.00 ............... 4,500.0 75.0 250.0 33.0 1,280.01 42.5 90.0 8,000.0 4,500.0 75.0 250.0 33.0 1,280.0 42.5 90.0 8,000.0 4.500,00 75.0 250.0 33.0 .......... 1,280.0 42.5 90.0 8,000.0 4,500.0 75.0 250.0 33.0 1,280.0 42.5 90.0 8,000.0 4,500.00 75.0 250.0 33.0 .......... 1,280.0 42.5 90.0 8,000.0 4,500.00 75.0 250.0 33.0 1,280.0 42.5 90.0 8,000.0 4.500,00 75.0 250.0 33.0 1,280.0 42.5 90.0 8,000.0 4,500.0 75.0 250.0 33.0 1.280.00 42.5 90.0 8,000.0 4,500.00 75.0 250.0 33.0 1,280.0 42.5 90.0 8,000.0 4,500.0 75.0 250.0 33.0 1,280.0 42.5 90.0 96,000.00 54,000.0 900.0 3,000.0 396.0 15.360.00 510.0 1,080.0 ........ .......... TER HERRRRRRRE WWW: WWW: WWW General & Administrative Expenses: Bank Fees General Council - Store Rent - Store Water, Gas, Electricity Expenses - Store Recent ERREPRINT 48.0 33.0 5,120.0 127.5 48.0 33.0 5.120.00 127.5 48.0 33.0 5,120.0 127.5 48.0 33.0 5,120.0 127.5 48.0 33.0 5,120.0 127.5 48.0 33.0 5.120.01 127.5 48.0 33.0 5.120.00 127.5 48.0 33.0 5,120.0 127.5 48.0 33.0 5,120.0 127.5 48.0 33.0 5.120.01 127.51 48.0 33.0 5,120.0 127.5 48.0 33.0 5,120.0 127.5 576.0 396.0 61.440.0 1.530.0 ****... ********* Total Operating Expense 19.599.0 19,599.0 19.599.0 19,599.0 19.599.0 19,599.0 19.599.0 19,599.C 19,599.0 19,599.0 19,599.0 19.599.0 235.188.0 Net Operating Profit 12.671.0 14.351.0 11,201.0 11.761.0 11.131.01 23.731.0 22.541.0 17.151.0 8.371.0 11.551.0 16.871.0 15.531.01 176.862.0 Non-Operating Income and Expenses Wages To Optometrists 13,000.0 13,000.0 13,000.01 13,000.0 13,000.0 13,000.0 13,000.0 13,000.0 13,000.0 13,000.0 13,000.0 13,000.0 156,000.00 Profit (Loss) before income tax 6.571.0 8.626.0 5,851.0 5.586.0 5.706.0 23.331.0 21,691.0 13.901.0 4.146.0 6.951.0 15,421.0 14,531.0 132.312.0 CASH BUDGET Jan-21 Jul-21 Feb-21 -14,559.0 Mar-21 -8,574.0 Apr-21 -3,389.4 May-21 -17,410.8 Jun-21 -13,742.0 Aug-21 9,179.6 Sep-21 23,625.2 Oct-21 26,225.8 Nov-21 12,922.2 Dec-21 28,125.6 TOTAL 49,076.8 0.0 6,673.6 OPENING CASH BALANCE CASH INFLOWS: Cash Sales - Sunglasses & Perscription Glasses Cash Sales - Eye Test Reciepts from Debtors 40,920.0 6,900.00 7,161.0 43,080.0 7,275.0 9,585.0 3,980.0 7,650.0 10,121.00 39,840.0 6,825.0 10,033.0 39,560.0 7,575.0 9,907.0 56,920,0 12,600.0 12,935.0 55,280.0 12,150.0 13,509.0 47,720.0 9,750.0 12.538.0 36,440.0 8,775.0 10,145.0 40,520.00 8,400.0 10.106.0 48,440.0 11,550.0 11,414.01 51,360.0 12,000.0 12.423.0 504,060.0 111,450.00 129,877.0 TOTAL CASH AVAILABLE: 54,981.0 59,940.0 57,451.0 56,698.0 57,042.0 82,455.0 80,939.0 70,008.0 55,360.0 59,026.0 71,404.0 75,783.0 781,087.0 HERRE 17,395.0 8,000.0 4,500.0 13,000.0 75.0 21,154.0 8,000.0 4,500.0 13,000.00 75.0 18,955.0 8,000.0 4,500.0 13.000.0 75.0 18,574.0 8,000.0 4,500.0 13,000.0 75.0 20,572.2 8,000.00 4,500.0 13,000.0 75.0 25,728.4 8,000.0 4,500.0 13.000.0 75.0 3,000.0 26,288.0 8,000.0 4,500.0 13,000.0 75.0 22,761.4 8,000.0 4,500.00 13,000.0 75.0 19,448.4 8,000.00 4,500.0 13,000.0 75.0 20,184.6 8,000.0 4,500.0 13,000.0 75.0 23,399.6 8,000.0 4,500.0 13,000.00 75.0 CASH OUTFLOWS Payment To Suppliers Wages To Sales Assistant Wages To Office Staff Wages To Optometrists Marketing Expenses Insurance Expenses Bank Fees Office Supplies General Council Rent Water, Gas, Electricity Expenses Owner's Drawings 19,800.4 8,000.0 4,500.0 13,000.0 75.0 254,261.0 96,000.0 54,000.0 156,000.0 900.0 3,000.0 576.0 1,080.0 792.0 76,800.0 2,040.0 85,632.0 144.0 90.0 144.0 90.0 144.0 90.0 144.0 90.0 90.0 90.0 90.01 90.0 90.0 90.0 90.0 90.0 792.0 ... 19,200.0 19,200.0 19,200.0 19,200.0 ******** 510.0 7,136.0 510.0 7,136.0 510.0 7,136.0 510.0 7,136.0 7,136.0 7,136.0 7,136.01 7,136.0 7,136.0 7,136.0 7,136.0 7,136.0 TOTAL CASH OUTFLOWS 69,540.0 53,955.0 52,266.0 70,719.0 53,373.2 62,039.4 78,433.0 55,562.4 52,759.4 72,329.6 56,200.6 53,903.4 731,081.0 CLOSING CASH BALANCE -14,559.0 -8,574.0 -3,389.4 -17,410.4 -13,742.0 6,673.6 9,179.6 23,625.2 26,225.8 12,922.2 28,125.6 50,005.2 99,082.8 Additional Information: Both James and Olivia are owners within the business and each of them draws an amount of $1784 per month. Each owner plans on increasing the drawings to $3568 month starting from January of 2021. As the manager, James keeps a close eye on inventory management and would like to always maintain a monthly ending inventory requirement of 30% of next month's sales. You can assume the beginning inventory for Jan 2021 to be o units for both sunglasses and prescription glasses. All purchases of inventory with the current supplier are on a credit basis, with 70% of the amount settled in the same month of purchase and the remaining 30% settled one month after the month of purchase. You can assume that all credit amounts for purchase of inventory prior to January 2021 have been settled. The business typically will have 80% of their sales of sunglasses and prescription glasses as cash, with the remaining 20% on credit. Of the credit sales, 70% is collected in the month of sales, 20% is collected one month after the sales, and 10% is collected two months after the sales. You can assume that all credit amounts for sale inventory prior to January 2021 have been settled All customers coming in for an eye-test pay for the service in cash 100% of the time. The business has the following non-current assets: In 2019, the business purchased specialised optometry equipment to provide comprehensive eye-tests. The total cost of equipment is $13620 and it is expected to last 5 years. Other office equipment has a total cost of $30480 and depreciates at 20% per annum. Shop Fittings were originally purchased at $64920 and depreciate at 10% per annum. All non-current assets have $0 residual value and are depreciated using the straight-line method of depreciation. Other Fixed Costs: Marketing expense of $900 per annumis paid evenly across 12 months. $3000 of general business insurance is paid in July every year. This insurance covers the period 1st Jan to 31st Dec every year. (100% office) Bank fees works out to be $48 per month and are paid at the start of each quarter. On average, the office supplies are purchased, paid and expensed every month to the amount of $90. General council rates are $792 per year and are usually paid in December every year. The rates cover the period 1st Jan to 31st Dec every year. (50% store: 50% office) Rent is paid at the start of each quarter and works out to be $6400 per month. (80% store: 20% office) Water, gas and electricity are combined under utility expense which adds up to $510 per quarter and is usually paid at the end of each quarter. (75% store: 25% office) "Note: Quarter 1 runs from 1 Jan-31 Mar; Quarter 2 runs from 1 Apr - 30 Jun; Quarter 3 runs from 1 Jul - 30 Sep: Quarter 4 runs from 10ct - 31 Dec. BUDGETED INCOME STATEMENT Jan-211 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 TOTAL 50.650.01 Sale Value Cost Of Sale Gross Profit 51,150.0 18,880.0 32,270.00 53,850.00 19,900.0 33.950.0 49,600,00 18,800.00 30.800.0 49,800.0 18,440.0 31,360.0 49,450.0 18,720.01 30.730.01 71,150.0 27,820.0 43.330.01 69,100.0 26,960.0 42.140.0 59,650.0 22,900.0 36.750.0 45,550,0 17,580.0 27,970.0 19,500.00 60,550,0 24,080.0 36.470.01 60,550.0 671,050.0 25,420.0 259,000.0 35,130.0 412.050.0 31,150.0 Other Income: 6,900.00 7.275.0 7,650.00 6,825.0 7,575.0 12,600.0 12,150.0 9,750.0 8,775.0 8,400.0 11,550.00 12,000.0 111,450.00 HERRER *** Operating Expenses: Selling Expenses: Wages To Sales Assistant ........................................... Wages To Office Staff Marketing Expenses Insurance Expenses General Council - Office Rent - Office Water, Gas, Electricity Expenses - Office Office Supplies *** :.................................................. 8,000.0 4,500.00 75.0 250.0 33.0 1,280.0 42.5 90.0 8,000.0 4.500.01 75.0 250.0 33.0 1,280.0 42.5 90.0 8,000.00 ............... 4,500.0 75.0 250.0 33.0 1,280.01 42.5 90.0 8,000.0 4,500.0 75.0 250.0 33.0 1,280.0 42.5 90.0 8,000.0 4.500,00 75.0 250.0 33.0 .......... 1,280.0 42.5 90.0 8,000.0 4,500.0 75.0 250.0 33.0 1,280.0 42.5 90.0 8,000.0 4,500.00 75.0 250.0 33.0 .......... 1,280.0 42.5 90.0 8,000.0 4,500.00 75.0 250.0 33.0 1,280.0 42.5 90.0 8,000.0 4.500,00 75.0 250.0 33.0 1,280.0 42.5 90.0 8,000.0 4,500.0 75.0 250.0 33.0 1.280.00 42.5 90.0 8,000.0 4,500.00 75.0 250.0 33.0 1,280.0 42.5 90.0 8,000.0 4,500.0 75.0 250.0 33.0 1,280.0 42.5 90.0 96,000.00 54,000.0 900.0 3,000.0 396.0 15.360.00 510.0 1,080.0 ........ .......... TER HERRRRRRRE WWW: WWW: WWW General & Administrative Expenses: Bank Fees General Council - Store Rent - Store Water, Gas, Electricity Expenses - Store Recent ERREPRINT 48.0 33.0 5,120.0 127.5 48.0 33.0 5.120.00 127.5 48.0 33.0 5,120.0 127.5 48.0 33.0 5,120.0 127.5 48.0 33.0 5,120.0 127.5 48.0 33.0 5.120.01 127.5 48.0 33.0 5.120.00 127.5 48.0 33.0 5,120.0 127.5 48.0 33.0 5,120.0 127.5 48.0 33.0 5.120.01 127.51 48.0 33.0 5,120.0 127.5 48.0 33.0 5,120.0 127.5 576.0 396.0 61.440.0 1.530.0 ****... ********* Total Operating Expense 19.599.0 19,599.0 19.599.0 19,599.0 19.599.0 19,599.0 19.599.0 19,599.C 19,599.0 19,599.0 19,599.0 19.599.0 235.188.0 Net Operating Profit 12.671.0 14.351.0 11,201.0 11.761.0 11.131.01 23.731.0 22.541.0 17.151.0 8.371.0 11.551.0 16.871.0 15.531.01 176.862.0 Non-Operating Income and Expenses Wages To Optometrists 13,000.0 13,000.0 13,000.01 13,000.0 13,000.0 13,000.0 13,000.0 13,000.0 13,000.0 13,000.0 13,000.0 13,000.0 156,000.00 Profit (Loss) before income tax 6.571.0 8.626.0 5,851.0 5.586.0 5.706.0 23.331.0 21,691.0 13.901.0 4.146.0 6.951.0 15,421.0 14,531.0 132.312.0 CASH BUDGET Jan-21 Jul-21 Feb-21 -14,559.0 Mar-21 -8,574.0 Apr-21 -3,389.4 May-21 -17,410.8 Jun-21 -13,742.0 Aug-21 9,179.6 Sep-21 23,625.2 Oct-21 26,225.8 Nov-21 12,922.2 Dec-21 28,125.6 TOTAL 49,076.8 0.0 6,673.6 OPENING CASH BALANCE CASH INFLOWS: Cash Sales - Sunglasses & Perscription Glasses Cash Sales - Eye Test Reciepts from Debtors 40,920.0 6,900.00 7,161.0 43,080.0 7,275.0 9,585.0 3,980.0 7,650.0 10,121.00 39,840.0 6,825.0 10,033.0 39,560.0 7,575.0 9,907.0 56,920,0 12,600.0 12,935.0 55,280.0 12,150.0 13,509.0 47,720.0 9,750.0 12.538.0 36,440.0 8,775.0 10,145.0 40,520.00 8,400.0 10.106.0 48,440.0 11,550.0 11,414.01 51,360.0 12,000.0 12.423.0 504,060.0 111,450.00 129,877.0 TOTAL CASH AVAILABLE: 54,981.0 59,940.0 57,451.0 56,698.0 57,042.0 82,455.0 80,939.0 70,008.0 55,360.0 59,026.0 71,404.0 75,783.0 781,087.0 HERRE 17,395.0 8,000.0 4,500.0 13,000.0 75.0 21,154.0 8,000.0 4,500.0 13,000.00 75.0 18,955.0 8,000.0 4,500.0 13.000.0 75.0 18,574.0 8,000.0 4,500.0 13,000.0 75.0 20,572.2 8,000.00 4,500.0 13,000.0 75.0 25,728.4 8,000.0 4,500.0 13.000.0 75.0 3,000.0 26,288.0 8,000.0 4,500.0 13,000.0 75.0 22,761.4 8,000.0 4,500.00 13,000.0 75.0 19,448.4 8,000.00 4,500.0 13,000.0 75.0 20,184.6 8,000.0 4,500.0 13,000.0 75.0 23,399.6 8,000.0 4,500.0 13,000.00 75.0 CASH OUTFLOWS Payment To Suppliers Wages To Sales Assistant Wages To Office Staff Wages To Optometrists Marketing Expenses Insurance Expenses Bank Fees Office Supplies General Council Rent Water, Gas, Electricity Expenses Owner's Drawings 19,800.4 8,000.0 4,500.0 13,000.0 75.0 254,261.0 96,000.0 54,000.0 156,000.0 900.0 3,000.0 576.0 1,080.0 792.0 76,800.0 2,040.0 85,632.0 144.0 90.0 144.0 90.0 144.0 90.0 144.0 90.0 90.0 90.0 90.01 90.0 90.0 90.0 90.0 90.0 792.0 ... 19,200.0 19,200.0 19,200.0 19,200.0 ******** 510.0 7,136.0 510.0 7,136.0 510.0 7,136.0 510.0 7,136.0 7,136.0 7,136.0 7,136.01 7,136.0 7,136.0 7,136.0 7,136.0 7,136.0 TOTAL CASH OUTFLOWS 69,540.0 53,955.0 52,266.0 70,719.0 53,373.2 62,039.4 78,433.0 55,562.4 52,759.4 72,329.6 56,200.6 53,903.4 731,081.0 CLOSING CASH BALANCE -14,559.0 -8,574.0 -3,389.4 -17,410.4 -13,742.0 6,673.6 9,179.6 23,625.2 26,225.8 12,922.2 28,125.6 50,005.2 99,082.8 Additional Information: Both James and Olivia are owners within the business and each of them draws an amount of $1784 per month. Each owner plans on increasing the drawings to $3568 month starting from January of 2021. As the manager, James keeps a close eye on inventory management and would like to always maintain a monthly ending inventory requirement of 30% of next month's sales. You can assume the beginning inventory for Jan 2021 to be o units for both sunglasses and prescription glasses. All purchases of inventory with the current supplier are on a credit basis, with 70% of the amount settled in the same month of purchase and the remaining 30% settled one month after the month of purchase. You can assume that all credit amounts for purchase of inventory prior to January 2021 have been settled. The business typically will have 80% of their sales of sunglasses and prescription glasses as cash, with the remaining 20% on credit. Of the credit sales, 70% is collected in the month of sales, 20% is collected one month after the sales, and 10% is collected two months after the sales. You can assume that all credit amounts for sale inventory prior to January 2021 have been settled All customers coming in for an eye-test pay for the service in cash 100% of the time. The business has the following non-current assets: In 2019, the business purchased specialised optometry equipment to provide comprehensive eye-tests. The total cost of equipment is $13620 and it is expected to last 5 years. Other office equipment has a total cost of $30480 and depreciates at 20% per annum. Shop Fittings were originally purchased at $64920 and depreciate at 10% per annum. All non-current assets have $0 residual value and are depreciated using the straight-line method of depreciation. Other Fixed Costs: Marketing expense of $900 per annumis paid evenly across 12 months. $3000 of general business insurance is paid in July every year. This insurance covers the period 1st Jan to 31st Dec every year. (100% office) Bank fees works out to be $48 per month and are paid at the start of each quarter. On average, the office supplies are purchased, paid and expensed every month to the amount of $90. General council rates are $792 per year and are usually paid in December every year. The rates cover the period 1st Jan to 31st Dec every year. (50% store: 50% office) Rent is paid at the start of each quarter and works out to be $6400 per month. (80% store: 20% office) Water, gas and electricity are combined under utility expense which adds up to $510 per quarter and is usually paid at the end of each quarter. (75% store: 25% office) "Note: Quarter 1 runs from 1 Jan-31 Mar; Quarter 2 runs from 1 Apr - 30 Jun; Quarter 3 runs from 1 Jul - 30 Sep: Quarter 4 runs from 10ct - 31 Dec