Tom Gonzalez, founder of Safety-Plus, expects to spend the next one-half year developing and testing prototypes for a safety light to be worn by runners. Tom anticipates paying monthly rent of $950 for space in a local warehouse where the safety light will be designed, developed, and tested. Utility expenses for power and heat are estimated at $450 per month. Tom plans to draw down a salary of $1,750 per month. Materials needed to build and test an initial prototype product are expected to cost $8,500. In addition, each redesign and new prototype will require an additional $4,900 investment (in other words, the first prototype will cost $8,000 and each additional prototype will cost $4,900). Tom anticipates that before the final safety light is ready for market at the end of six months, the initial plus two more prototypes will need to be built and tested. Costs associated with test marketing the safetly light are estimated at $11,500. A. Determine the amount of financial capital that Tom Gonzalez will need during the six-months it will take to develop and test market the safety light. B. What type of financial capital is needed and what are the likely sources of that capital for Tom? C. What would be your estimate of the amount of financial capital needed if the product development period lasted nine months? (assume that even though it take longer, only three prototypes will be needed). D. What compensation arrangements would you recommend as he hires additional members of the management team? Lets assume that Tom does indeed develop and successfully market the safety light product. Toms venture will purchase materials for making the product from others, assemble the products at the ventures facilities, and hire product sales representatives to sell the product through local retail and discount stores. The costs of plastic; bolts, washers, and nuts; reflective material; and a micro-chip are expected to be $3.35 per safety light. Assembly costs are projected at $1.95 per unit. Shipping and delivery costs are estimated at $.20 per unit and Tom will have to pay commissions of $.35 per unit sold by the sales representatives. A. What will it cost to produce and sell each safety light? B. What price will Tom have to charge for a safety light if he wants a markup of 60 percent on each sale? Now, what would the retailers have to ultimately sell a safety light if they, in turn, desired a mark-up before their expenses of 50 percent? C. Now that products are selling, Tom feels he should be paid a salary of $5,500 per month. Other general and administrative expenses will be $4,950 per month (including previously mentioned general and administration expenses). How many units of safety lights will the venture have to sell to cover all operating and administrative costs during the first year of operation?