1. What is your ending cash as of 12/31/22? Submit the amount, just one number.

1. What is your projected cash flow from operation in FY 2022? Submit the amount, just one number.

1. The companys return policy makes sense. State your opinion and have your argument for or against it ready for discussion in class.

1. How many units sold in FY 2022 did you assume that will be returned? State one number.

1. What is your revenue in FY 2022? State the dollar amount.

1. Which inventory management policy are you using in this case? Choose on to answer the question. Bring your argument from an entrepreneurial leader's perspective to class.

• FIFO (First-in/First-out)

- LIFO (Last-in/First-out)

• Average

• Specific identification

1. What are your COGS (Cost of Goods Sold) in FY 2022? State the amount

WHALES OF SUMMER IF YOU HAVEN'T LEARNED TO LOVE IT BY 2027, WE'LL BUY IT BACK AT THE ORIGINAL PRICE. The above statement appeared as the prominent headline in a Collectables, Ltd, advertisement placed in a monthly magazine catering to a select, high income readership. Its intent is to announce the company's new porcelain figurine, "Whales of Summer," which would be offered in limited quantities at a price of $2,000. Collectables, Ltd.'s idea is to offer literally "a beautiful investment opportunity with capital gains potential to a wealthy investor. By guaranteeing that production would be limited, the figurines could immediately attain status similar to an antique. The guarantee offered by Collectables was quite simple: "SUBUECT TO BEING IN ITS ORIGINAL CONDITION, WE GUARANTEE TO REPUACHASE ANY OF OUR "WHALES OF SUMMER" FIGURINES AT THE ORIGINAL PRICE OF \$2,OOO AT ANY TIME AFTER FIVE YEARS FROM THE DATE OF PURCHASE." The guarantee was not restricted to the original purchaser and hence was transterable from one party to another. The only other return provision allowed a purchaser to receive an 80 percent refund of the purchase price if the figurine was returned within three months from the date of purchase. I The figurines are offered for sale in only one extremely reputable store in each of ten large American cities. These stores were individually identified in the advertisement. Each of the ten was provided with one "Whales of Summer" figurine to be used for display. It was informally understood that Collectables, Ltd. would not ask for the return of the figurine. The stores otherwise have no inventory. When a customer signs a "subscription request," the store forwards it to Collectables. Collectables shipped the figurine but the store was responsibie for collecting the money. If a figurine were returned in the first three months, Collectables would simply send an 80 percent refund ($1,600) to the customer. Collectables would not request a refund of the 10 percent sales commission from the retail store. Production of "Whales of Summer" is strictly limited to 500 pieces. The des ign of the figurine and the moid from which it would be produced were created by an artist for a fee of $75,000. This fee will be paid in September 2023. Production is contracted out to a reputable company which agreed to run batches of 100 pieces upon instructions from collectables. When a batch is produced, each figurine is then hand painted in the Viennese tradition of hand-painted Augarten China figurines, and finished by skilled workers. Due to the extremely high quality-standards demanded by Collectables, the early batches cost substantially more to produce, paint, and finish than later batches. Production cost data is summarized in EXHilBrT 1. Collectables was incorporated as a separate legal entity in May 2023. The stock was sold to ten angel investors for $20,000 each. The angels' interest in Collectables was in part nurtured by the widely publicized success stories of companies like Collectors Universe, a public company until late 2020, that have capitalized on the public's recent interest in "collector items" as an investment hedge against inflation. Both the management and owners of Collectables hope to build the company into a leader in this new, unexploited biodiversity-inspired figurine market. Encouraged by the apparent success of the company's first figurine, management was already laying detailed plans for a number of future offerings. Design is going to begin in July 2023; production in September; promotion and sales in October. A summary of activities is presented in EXHIBIT 2. The bulk of 2023 sales is projected to be related to the year-end Christmas season. Of the 290 figurines projected to be shipped to customers in 2023,100 are to shareholders (or members of their families). Since these sales are not made through a retail dealer, the full $2,000 purchase price is received in cash by Collectables. Of the 190 pieces shipped to non-related parties, cash is projected to be received by year end from the retailer for 140 pieces; 50 pieces are uncollected; none of the 190 pieces are returned in 2023 but 20 of them are expected to be returned early in 2024, some after the three-month return period had expired. Each of the 20 customers will promptly receive a $1,600 cash refund. Promotional and advertising costs of $35,000 are expected to be paid in 2023 . Collectables plans to do no further advertising of "Whales of Summer" in 2023. General and Administrative expenses for 2023 are expected to be $80,000 and all these expenses are paid in cash before year end. It is expected that these costs would continue at roughly the same level in future years. EXHIBIT I. Batch Production Schestule Data EXHIBIT 2. Summary of Anticialed Activities for the Year Foded December 31,2023