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Task 2 of 2 Decision Making Exercise Instructions Scenario Mr. Neil Down is a sole trader and owns WoodyTrain, a toy store specialising in handcrafted wooden train toys. Mr Neil wants to raise 20,000 by getting a new partner. Instructions 1. Analyse the types of business budgets that Mr Neil Down may have prepared for this business organisation. Recommend how these budgets would allow a new partner to make an informed decision about investment. 2. Explain the different methods Mr Neil Down could use to calculate the unit cost of the handcrafted wooden train toys. 3. Compare the format of the financial statements that Mr Neil Down will currently prepare for his sole trader business with those prepared for a partnership and limited company. 4. Woody Train has been asked to supply a large number of toys to a large retailer at a discounted price of 50%. Advise Mr. Neil Down on what he needs to consider before replying to the retailer. 5. WoodyTrain is considering expanding and purchasing a new toy store. Two new stores are being considered - Toy Store A and Toy Store B. The following are the estimated cash flows for each building Year Toy Store A Toy Store B 0 -375 000 -425 000 1 200 000 200 000 2 110 000 150 000 3 220 000 300 000 250 000 4 130 000 The toy store's cost of capital is 12%. The extract from present value tables of 1 @ 12% Year 1 0.893 0.797 Year 2 Year 3 0.712 Year 4 0.636 Year 4 0.636 REQUIRED: Calculate for each building: Payback Net Present Value Recommend and justify, based on your financial analysis, which Toy Store, WoodyTrain should purchase. 5. For this task, you are employed as an adviser to a team of Toy Store Owners. For research, you should review the published accounts of Hamleys Group Limited (Toy Store), which can be downloaded from https://beta.companieshouse.gov.uk/company/02352435/filing-history You are required to prepare a business report that includes the following: 1. An evaluation of the financial statements of Hamleys Group Limited. You should evaluate the structure, format and requirements of their published accounts. 2. A description of how the following ratios could be used by organizations, such as Hamleys Group Limited and their stakeholders. You should consider the following ratio groups: a. Profitability b. Liquidity C. Efficiency d. Capital e. Investor Delivery and Submission 1x Answer to all the questions Summative Delivery and Submission Evidence generated for activities 1 and 2 Indicative word count 2500