Case+Analysis+5

Case Analysis Questions
Prepare a monthly production schedule and cash budget for the next 12 months based on the following three scenarios: a) Schedule
 * Monthly sales assumptions of 10,000 units/month.
 * Month ||  |||| Production || Sales || Promotion |||| Inventory ||
 * ||  || Molded || Packaged ||   ||   || Home || Warehouse ||
 * August ||  || 40,000 || 40,000 || 10,000 || 500 || 10,000 || 19,500 ||
 * September || 0 || 0 || 10,000 || 500 || 10,000 || 9,000 ||
 * October ||  || 5,000 || 5,000 || 10,000 || 500 || 10,000 || 3,500 ||
 * November ||  || 7,000 || 7,000 || 10,000 || 500 || 10,000 || 0 ||
 * December ||  || 10,000 || 10,000 || 10,000 || 0 || 10,000 || 0 ||
 * January ||  || 10,000 || 10,000 || 10,000 || 0 || 10,000 || 0 ||
 * February ||  || 10,000 || 10,000 || 10,000 || 0 || 10,000 || 0 ||
 * March ||  || 10,000 || 10,000 || 10,000 || 0 || 10,000 || 0 ||
 * April ||  || 10,000 || 10,000 || 10,000 || 0 || 10,000 || 0 ||
 * May ||  || 10,000 || 10,000 || 10,000 || 0 || 10,000 || 0 ||
 * June ||  || 10,000 || 10,000 || 10,000 || 0 || 10,000 || 0 ||
 * July ||  || 10,000 || 10,000 || 10,000 || 0 || 10,000 || 0 ||

b) Cash flow


 * **August** ||  ||   || **September** ||   ||   || **October** ||   ||   || **November** ||   ||
 * Start-up cash (Reid's loan) || 85,000 ||  || Start-up cash (Earnings last month) || 7,651 ||   || Start-up cash (Earnings last month) || 9,240 ||   || Start-up cash (Earnings last month) || 11,975 ||
 * Sales (to be paid back 50% one month period and 50% two month period) || 0 ||  || Sales (to be paid back 50% one month period and 50% two month period) || 9,100 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 18,200 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 18,200 ||
 * Cost of goods produced || 51,680 ||  || Cost of goods produced || 0 ||   || Cost of goods produced || 6,460 ||   || Cost of goods produced || 9,044 ||
 * Expenses ||  ||   || Expenses ||   ||   || Expenses ||   ||   || Expenses ||   ||
 * Mold 1 || 12,075 ||  || Mold 1 || 0 ||   || Mold 1 || 0 ||   || Mold 1 || 0 ||
 * Admin expenses || 4,961 ||  || Admin expenses || 4,961 ||   || Admin expenses || 4,961 ||   || Admin expenses || 4,961 ||
 * Depreciation || 6,490 ||  || Depreciation || 10 ||   || Depreciation || 820 ||   || Depreciation || 1,144 ||
 * Warehouse || 230 ||  || Warehouse || 230 ||   || Warehouse || 230 ||   || Warehouse || 0 ||
 * Earnings before tax || 9,564 ||  || Earnings before tax || 11,550 ||   || Earnings before tax || 14,969 ||   || Earnings before tax || 15,026 ||
 * Tax || 1,913 ||  || Tax || 2,310 ||   || Tax || 2,994 ||   || Tax || 3,005 ||
 * Earnings after tax || 7,651 ||  || Earnings after tax || 9,240 ||   || Earnings after tax || 11,975 ||   || Earnings after tax || 12,021 ||
 * **December** ||  ||   || **January** ||   ||   || **February** ||   ||   || **March** ||   ||
 * Start-up cash (Earnings last month) || 12,021 ||  || Start-up cash (Earnings last month) || 9,085 ||   || Start-up cash (Earnings last month) || 10,288 ||   || Start-up cash (Earnings last month) || 11,250 ||
 * Sales (to be paid back 50% one month period and 50% two month period) || 18,200 ||  || Sales (to be paid back 50% one month period and 50% two month period) || 18,200 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 18,200 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 18,200 ||
 * Cost of goods produced || 12,920 ||  || Cost of goods produced || 8,480 ||   || Cost of goods produced || 8,480 ||   || Cost of goods produced || 8,480 ||
 * Expenses ||  ||   || Expenses ||   ||   || Expenses ||   ||   || Expenses ||   ||
 * Mold 1 || 0 ||  || Mold 1 || 0 ||   || Mold 1 || 0 ||   || Mold 1 || 0 ||
 * Admin expenses || 4,315 ||  || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||
 * Depreciation || 1,630 ||  || Depreciation || 1,630 ||   || Depreciation || 1,630 ||   || Depreciation || 1,630 ||
 * Warehouse || 0 ||  || Warehouse || 0 ||   || Warehouse || 0 ||   || Warehouse || 0 ||
 * Earnings before tax || 11,356 ||  || Earnings before tax || 12,869 ||   || Earnings before tax || 14,063 ||   || Earnings before tax || 15,025 ||
 * Tax || 2,271 ||  || Tax || 2,572 ||   || Tax || 2,813 ||   || Tax || 3,005 ||
 * Earnings after tax || 9,085 ||  || Earnings after tax || 10,288 ||   || Earnings after tax || 11,250 ||   || Earnings after tax || 12,020 ||
 * **April** ||  ||   || **May** ||   ||   || **June** ||   ||   || **July** ||   ||
 * Start-up cash (Earnings last month) || 12,020 ||  || Start-up cash (Earnings last month) || 12,636 ||   || Start-up cash (Earnings last month) || 13,129 ||   || Start-up cash (Earnings last month) || 13,523 ||
 * Sales (to be paid back 50% one month period and 50% two month period) || 18,200 ||  || Sales (to be paid back 50% one month period and 50% two month period) || 18,200 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 18,200 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 18,200 ||
 * Cost of goods produced || 8,480 ||  || Cost of goods produced || 8,480 ||   || Cost of goods produced || 8,480 ||   || Cost of goods produced || 8,480 ||
 * Expenses ||  ||   || Expenses ||   ||   || Expenses ||   ||   || Expenses ||   ||
 * Mold 1 || 0 ||  || Mold 1 || 0 ||   || Mold 1 || 0 ||   || Mold 1 || 0 ||
 * Admin expenses || 4,315 ||  || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||
 * Depreciation || 1,630 ||  || Depreciation || 1,630 ||   || Depreciation || 1,630 ||   || Depreciation || 1,630 ||
 * Warehouse || 0 ||  || Warehouse || 0 ||   || Warehouse || 0 ||   || Warehouse || 0 ||
 * Earnings before tax || 15,795 ||  || Earnings before tax || 16,411 ||   || Earnings before tax || 16,904 ||   || Earnings before tax || 17,928 ||
 * Tax || 3,159 ||  || Tax || 3,228 ||   || Tax || 3,281 ||   || Tax || 3,460 ||
 * Earnings after tax || 12,636 ||  || Earnings after tax || 13,129 ||   || Earnings after tax || 13,523 ||   || Earnings after tax || 13,839 ||
 * Earnings after tax || 9,085 ||  || Earnings after tax || 10,288 ||   || Earnings after tax || 11,250 ||   || Earnings after tax || 12,020 ||
 * **April** ||  ||   || **May** ||   ||   || **June** ||   ||   || **July** ||   ||
 * Start-up cash (Earnings last month) || 12,020 ||  || Start-up cash (Earnings last month) || 12,636 ||   || Start-up cash (Earnings last month) || 13,129 ||   || Start-up cash (Earnings last month) || 13,523 ||
 * Sales (to be paid back 50% one month period and 50% two month period) || 18,200 ||  || Sales (to be paid back 50% one month period and 50% two month period) || 18,200 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 18,200 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 18,200 ||
 * Cost of goods produced || 8,480 ||  || Cost of goods produced || 8,480 ||   || Cost of goods produced || 8,480 ||   || Cost of goods produced || 8,480 ||
 * Expenses ||  ||   || Expenses ||   ||   || Expenses ||   ||   || Expenses ||   ||
 * Mold 1 || 0 ||  || Mold 1 || 0 ||   || Mold 1 || 0 ||   || Mold 1 || 0 ||
 * Admin expenses || 4,315 ||  || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||
 * Depreciation || 1,630 ||  || Depreciation || 1,630 ||   || Depreciation || 1,630 ||   || Depreciation || 1,630 ||
 * Warehouse || 0 ||  || Warehouse || 0 ||   || Warehouse || 0 ||   || Warehouse || 0 ||
 * Earnings before tax || 15,795 ||  || Earnings before tax || 16,411 ||   || Earnings before tax || 16,904 ||   || Earnings before tax || 17,928 ||
 * Tax || 3,159 ||  || Tax || 3,228 ||   || Tax || 3,281 ||   || Tax || 3,460 ||
 * Earnings after tax || 12,636 ||  || Earnings after tax || 13,129 ||   || Earnings after tax || 13,523 ||   || Earnings after tax || 13,839 ||
 * Depreciation || 1,630 ||  || Depreciation || 1,630 ||   || Depreciation || 1,630 ||   || Depreciation || 1,630 ||
 * Warehouse || 0 ||  || Warehouse || 0 ||   || Warehouse || 0 ||   || Warehouse || 0 ||
 * Earnings before tax || 15,795 ||  || Earnings before tax || 16,411 ||   || Earnings before tax || 16,904 ||   || Earnings before tax || 17,928 ||
 * Tax || 3,159 ||  || Tax || 3,228 ||   || Tax || 3,281 ||   || Tax || 3,460 ||
 * Earnings after tax || 12,636 ||  || Earnings after tax || 13,129 ||   || Earnings after tax || 13,523 ||   || Earnings after tax || 13,839 ||
 * Earnings after tax || 12,636 ||  || Earnings after tax || 13,129 ||   || Earnings after tax || 13,523 ||   || Earnings after tax || 13,839 ||
 * Earnings after tax || 12,636 ||  || Earnings after tax || 13,129 ||   || Earnings after tax || 13,523 ||   || Earnings after tax || 13,839 ||

Monthly Schedule b) Cash flow
 * Monthly sales assumptions of 30,000 units/month. (Assume that the double cavity mould is ordered in October.)
 * Month ||  |||| Production || Sales || Promotion |||| Inventory ||
 * ||  || Molded || Packaged ||   ||   || Home || Warehouse ||
 * August ||  || 40,000 || 40,000 || 30,000 || 500 || 9,500 || 0 ||
 * September || 41,000 || 41,000 || 30,000 || 500 || 10,000 || 0 ||
 * October ||  || 40,500 || 40,500 || 30,000 || 500 || 10,000 || 0 ||
 * November ||  || 40,500 || 40,500 || 30,000 || 500 || 10,000 || 0 ||
 * December ||  || 30,000 || 30,000 || 30,000 || 0 || 10,000 || 0 ||
 * January ||  || 30,000 || 30,000 || 30,000 || 0 || 10,000 || 0 ||
 * February ||  || 30,000 || 30,000 || 30,000 || 0 || 10,000 || 0 ||
 * March ||  || 30,000 || 30,000 || 30,000 || 0 || 10,000 || 0 ||
 * April ||  || 30,000 || 30,000 || 30,000 || 0 || 10,000 || 0 ||
 * May ||  || 30,000 || 30,000 || 30,000 || 0 || 10,000 || 0 ||
 * June ||  || 30,000 || 30,000 || 30,000 || 0 || 10,000 || 0 ||
 * July ||  || 30,000 || 30,000 || 30,000 || 0 || 10,000 || 0 ||


 * **August** ||  ||   || **September** ||   ||   || **October** ||   ||   || **November** ||   ||
 * Start-up cash (Reid's loan) || 85,000 ||  || Start-up cash (Earnings last month) || 7,835 ||   || Start-up cash (Earnings last month) || -29,450 ||   || Start-up cash (Earnings last month) || -59,374 ||
 * Sales (to be paid back 50% one month period and 50% two month period) || 0 ||  || Sales (to be paid back 50% one month period and 50% two month period) || 27,300 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 54,600 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 54,600 ||
 * Cost of goods produced || 51,680 ||  || Cost of goods produced || 52,972 ||   || Cost of goods produced || 52,326 ||   || Cost of goods produced || 52,326 ||
 * Expenses ||  ||   || Expenses ||   ||   || Expenses ||   ||   || Expenses ||   ||
 * Mold 1 || 12,075 ||  || Mold 1 || 0 ||   || Mold 1 || 0 ||   || Mold 1 || 0 ||
 * Mold 2 || 0 ||  || Mold 2 || 0 ||   || Mold 2 || 20,667 ||   || Mold 2 || 20,667 ||
 * Admin expenses || 4,961 ||  || Admin expenses || 4,961 ||   || Admin expenses || 4,961 ||   || Admin expenses || 4,961 ||
 * Depreciation || 6,490 ||  || Depreciation || 6,652 ||   || Depreciation || 6,571 ||   || Depreciation || 6,571 ||
 * Warehouse || 0 ||  || Warehouse || 0 ||   || Warehouse || 0 ||   || Warehouse || 0 ||
 * Earnings before tax || 9,794 ||  || Earnings before tax || -29,450 ||   || Earnings before tax || -59,374 ||   || Earnings before tax || -89,299 ||
 * Tax || 1,959 ||  || Tax || 0 ||   || Tax || 0 ||   || Tax || 0 ||
 * Earnings after tax || 7,835 ||  || Earnings after tax || -29,450 ||   || Earnings after tax || -59,374 ||   || Earnings after tax || -89,299 ||
 * **December** ||  ||   || **January** ||   ||   || **February** ||   ||   || **March** ||   ||
 * Start-up cash (Earnings last month) || -89,299 ||  || Start-up cash (Earnings last month) || -103,311 ||   || Start-up cash (Earnings last month) || -78,476 ||   || Start-up cash (Earnings last month) || -53,641 ||
 * Sales (to be paid back 50% one month period and 50% two month period) || 54,600 ||  || Sales (to be paid back 50% one month period and 50% two month period) || 54,600 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 54,600 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 54,600 ||
 * Cost of goods produced || 38,760 ||  || Cost of goods produced || 25,440 ||   || Cost of goods produced || 25,440 ||   || Cost of goods produced || 25,440 ||
 * Expenses ||  ||   || Expenses ||   ||   || Expenses ||   ||   || Expenses ||   ||
 * Mold 1 || 0 ||  || Mold 1 || 0 ||   || Mold 1 || 0 ||   || Mold 1 || 0 ||
 * Mold 2 || 20,667 ||  || Mold 2 || 0 ||   || Mold 2 || 0 ||   || Mold 2 || 0 ||
 * Admin expenses || 4,315 ||  || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||
 * Depreciation || 4,870 ||  || Depreciation || 10 ||   || Depreciation || 10 ||   || Depreciation || 10 ||
 * Warehouse || 0 ||  || Warehouse || 0 ||   || Warehouse || 0 ||   || Warehouse || 0 ||
 * Earnings before tax || -103,311 ||  || Earnings before tax || -78,476 ||   || Earnings before tax || -53,641 ||   || Earnings before tax || -28,806 ||
 * Tax || 0 ||  || Tax || 0 ||   || Tax || 0 ||   || Tax || 0 ||
 * Earnings after tax || -103,311 ||  || Earnings after tax || -78,476 ||   || Earnings after tax || -53,641 ||   || Earnings after tax || -28,806 ||
 * **April** ||  ||   || **May** ||   ||   || **June** ||   ||   || **July** ||   ||
 * Start-up cash (Earnings last month) || -28,806 ||  || Start-up cash (Earnings last month) || -3,071 ||   || Start-up cash (Earnings last month) || 16,691 ||   || Start-up cash (Earnings last month) || 33,221 ||
 * Sales (to be paid back 50% one month period and 50% two month period) || 54,600 ||  || Sales (to be paid back 50% one month period and 50% two month period) || 54,600 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 54,600 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 54,600 ||
 * Cost of goods produced || 25,440 ||  || Cost of goods produced || 25,440 ||   || Cost of goods produced || 25,440 ||   || Cost of goods produced || 25,440 ||
 * Expenses ||  ||   || Expenses ||   ||   || Expenses ||   ||   || Expenses ||   ||
 * Mold 1 || 0 ||  || Mold 1 || 0 ||   || Mold 1 || 0 ||   || Mold 1 || 0 ||
 * Mold 2 || 0 ||  || Mold 2 || 0 ||   || Mold 2 || 0 ||   || Mold 2 || 0 ||
 * Admin expenses || 4,315 ||  || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||
 * Depreciation || 10 ||  || Depreciation || 10 ||   || Depreciation || 10 ||   || Depreciation || 10 ||
 * Warehouse || 0 ||  || Warehouse || 0 ||   || Warehouse || 0 ||   || Warehouse || 0 ||
 * Earnings before tax || -3,071 ||  || Earnings before tax || 20,864 ||   || Earnings before tax || 41,526 ||   || Earnings before tax || 58,056 ||
 * Tax || 0 ||  || Tax || 4,173 ||   || Tax || 8,305 ||   || Tax || 11,611 ||
 * Earnings after tax || -3,071 ||  || Earnings after tax || 16,691 ||   || Earnings after tax || 33,221 ||   || Earnings after tax || 46,445 ||
 * **April** ||  ||   || **May** ||   ||   || **June** ||   ||   || **July** ||   ||
 * Start-up cash (Earnings last month) || -28,806 ||  || Start-up cash (Earnings last month) || -3,071 ||   || Start-up cash (Earnings last month) || 16,691 ||   || Start-up cash (Earnings last month) || 33,221 ||
 * Sales (to be paid back 50% one month period and 50% two month period) || 54,600 ||  || Sales (to be paid back 50% one month period and 50% two month period) || 54,600 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 54,600 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 54,600 ||
 * Cost of goods produced || 25,440 ||  || Cost of goods produced || 25,440 ||   || Cost of goods produced || 25,440 ||   || Cost of goods produced || 25,440 ||
 * Expenses ||  ||   || Expenses ||   ||   || Expenses ||   ||   || Expenses ||   ||
 * Mold 1 || 0 ||  || Mold 1 || 0 ||   || Mold 1 || 0 ||   || Mold 1 || 0 ||
 * Mold 2 || 0 ||  || Mold 2 || 0 ||   || Mold 2 || 0 ||   || Mold 2 || 0 ||
 * Admin expenses || 4,315 ||  || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||
 * Depreciation || 10 ||  || Depreciation || 10 ||   || Depreciation || 10 ||   || Depreciation || 10 ||
 * Warehouse || 0 ||  || Warehouse || 0 ||   || Warehouse || 0 ||   || Warehouse || 0 ||
 * Earnings before tax || -3,071 ||  || Earnings before tax || 20,864 ||   || Earnings before tax || 41,526 ||   || Earnings before tax || 58,056 ||
 * Tax || 0 ||  || Tax || 4,173 ||   || Tax || 8,305 ||   || Tax || 11,611 ||
 * Earnings after tax || -3,071 ||  || Earnings after tax || 16,691 ||   || Earnings after tax || 33,221 ||   || Earnings after tax || 46,445 ||
 * Depreciation || 10 ||  || Depreciation || 10 ||   || Depreciation || 10 ||   || Depreciation || 10 ||
 * Warehouse || 0 ||  || Warehouse || 0 ||   || Warehouse || 0 ||   || Warehouse || 0 ||
 * Earnings before tax || -3,071 ||  || Earnings before tax || 20,864 ||   || Earnings before tax || 41,526 ||   || Earnings before tax || 58,056 ||
 * Tax || 0 ||  || Tax || 4,173 ||   || Tax || 8,305 ||   || Tax || 11,611 ||
 * Earnings after tax || -3,071 ||  || Earnings after tax || 16,691 ||   || Earnings after tax || 33,221 ||   || Earnings after tax || 46,445 ||
 * Earnings after tax || -3,071 ||  || Earnings after tax || 16,691 ||   || Earnings after tax || 33,221 ||   || Earnings after tax || 46,445 ||
 * Earnings after tax || -3,071 ||  || Earnings after tax || 16,691 ||   || Earnings after tax || 33,221 ||   || Earnings after tax || 46,445 ||

- Monthly sales assumptions of 5,000 units/month. Monthly Schedule b) Cash Flow
 * Month ||  |||| Production || Sales || Promotion |||| Inventory ||
 * ||  || Molded || Packaged ||   ||   || Home || Warehouse ||
 * August ||  || 40,000 || 40,000 || 5,000 || 500 || 10,000 || 24,500 ||
 * September || 0 || 0 || 5,000 || 500 || 10,000 || 19,000 ||
 * October ||  || 0 || 0 || 5,000 || 500 || 10,000 || 13,500 ||
 * November ||  || 0 || 0 || 5,000 || 500 || 10,000 || 8,000 ||
 * December ||  || 0 || 0 || 5,000 || 0 || 10,000 || 3,000 ||
 * January ||  || 7,000 || 7,000 || 5,000 || 0 || 10,000 || 5,000 ||
 * February ||  || 0 || 0 || 5,000 || 0 || 10,000 || 0 ||
 * March ||  || 5,000 || 5,000 || 5,000 || 0 || 10,000 || 0 ||
 * April ||  || 5,000 || 5,000 || 5,000 || 0 || 10,000 || 0 ||
 * May ||  || 5,000 || 5,000 || 5,000 || 0 || 10,000 || 0 ||
 * June ||  || 5,000 || 5,000 || 5,000 || 0 || 10,000 || 0 ||
 * July ||  || 5,000 || 5,000 || 5,000 || 0 || 10,000 || 0 ||


 * **August** ||  ||   || **September** ||   ||   || **October** ||   ||   || **November** ||   ||
 * Start-up cash (Reid's loan) || 85,000 ||  || Start-up cash (Earnings last month) || 7,651 ||   || Start-up cash (Earnings last month) || 5,600 ||   || Start-up cash (Earnings last month) || 7,599 ||
 * Sales (to be paid back 50% one month period and 50% two month period) || 0 ||  || Sales (to be paid back 50% one month period and 50% two month period) || 4,550 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 9,100 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 9,100 ||
 * Cost of goods produced || 51,680 ||  || Cost of goods produced || 0 ||   || Cost of goods produced || 0 ||   || Cost of goods produced || 0 ||
 * Expenses ||  ||   || Expenses ||   ||   || Expenses ||   ||   || Expenses ||   ||
 * Mold 1 || 12,075 ||  || Mold 1 || 0 ||   || Mold 1 || 0 ||   || Mold 1 || 0 ||
 * Admin expenses || 4,961 ||  || Admin expenses || 4,961 ||   || Admin expenses || 4,961 ||   || Admin expenses || 4,961 ||
 * Depreciation || 6,490 ||  || Depreciation || 10 ||   || Depreciation || 10 ||   || Depreciation || 10 ||
 * Warehouse || 230 ||  || Warehouse || 230 ||   || Warehouse || 230 ||   || Warehouse || 230 ||
 * Earnings before tax || 9,564 ||  || Earnings before tax || 7,000 ||   || Earnings before tax || 9,499 ||   || Earnings before tax || 11,498 ||
 * Tax || 1,913 ||  || Tax || 1,400 ||   || Tax || 1,900 ||   || Tax || 2,300 ||
 * Earnings after tax || 7,651 ||  || Earnings after tax || 5,600 ||   || Earnings after tax || 7,599 ||   || Earnings after tax || 9,199 ||
 * **December** ||  ||   || **January** ||   ||   || **February** ||   ||   || **March** ||   ||
 * Start-up cash (Earnings last month) || 9,199 ||  || Start-up cash (Earnings last month) || 10,995 ||   || Start-up cash (Earnings last month) || 6,776 ||   || Start-up cash (Earnings last month) || 9,241 ||
 * Sales (to be paid back 50% one month period and 50% two month period) || 9,100 ||  || Sales (to be paid back 50% one month period and 50% two month period) || 9,100 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 9,100 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 9,100 ||
 * Cost of goods produced || 0 ||  || Cost of goods produced || 5,936 ||   || Cost of goods produced || 0 ||   || Cost of goods produced || 4,240 ||
 * Expenses ||  ||   || Expenses ||   ||   || Expenses ||   ||   || Expenses ||   ||
 * Mold 1 || 0 ||  || Mold 1 || 0 ||   || Mold 1 || 0 ||   || Mold 1 || 0 ||
 * Admin expenses || 4,315 ||  || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||
 * Depreciation || 10 ||  || Depreciation || 1,144 ||   || Depreciation || 10 ||   || Depreciation || 820 ||
 * Warehouse || 230 ||  || Warehouse || 230 ||   || Warehouse || 0 ||   || Warehouse || 0 ||
 * Earnings before tax || 13,744 ||  || Earnings before tax || 8,470 ||   || Earnings before tax || 11,551 ||   || Earnings before tax || 8,966 ||
 * Tax || 2,749 ||  || Tax || 1,694 ||   || Tax || 2,310 ||   || Tax || 1,793 ||
 * Earnings after tax || 10,995 ||  || Earnings after tax || 6,776 ||   || Earnings after tax || 9,241 ||   || Earnings after tax || 7,173 ||
 * **April** ||  ||   || **May** ||   ||   || **June** ||   ||   || **July** ||   ||
 * Start-up cash (Earnings last month) || 7,173 ||  || Start-up cash (Earnings last month) || 5,518 ||   || Start-up cash (Earnings last month) || 4,194 ||   || Start-up cash (Earnings last month) || 3,136 ||
 * Sales (to be paid back 50% one month period and 50% two month period) || 9,100 ||  || Sales (to be paid back 50% one month period and 50% two month period) || 9,100 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 9,100 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 9,100 ||
 * Cost of goods produced || 4,240 ||  || Cost of goods produced || 4,240 ||   || Cost of goods produced || 4,240 ||   || Cost of goods produced || 4,240 ||
 * Expenses ||  ||   || Expenses ||   ||   || Expenses ||   ||   || Expenses ||   ||
 * Mold 1 || 0 ||  || Mold 1 || 0 ||   || Mold 1 || 0 ||   || Mold 1 || 0 ||
 * Admin expenses || 4,315 ||  || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||
 * Depreciation || 820 ||  || Depreciation || 820 ||   || Depreciation || 820 ||   || Depreciation || 820 ||
 * Warehouse || 0 ||  || Warehouse || 0 ||   || Warehouse || 0 ||   || Warehouse || 0 ||
 * Earnings before tax || 6,898 ||  || Earnings before tax || 5,243 ||   || Earnings before tax || 3,919 ||   || Earnings before tax || 2,861 ||
 * Tax || 1,380 ||  || Tax || 1,049 ||   || Tax || 784 ||   || Tax || 572 ||
 * Earnings after tax || 5,518 ||  || Earnings after tax || 4,194 ||   || Earnings after tax || 3,136 ||   || Earnings after tax || 2,288 ||
 * Earnings after tax || 10,995 ||  || Earnings after tax || 6,776 ||   || Earnings after tax || 9,241 ||   || Earnings after tax || 7,173 ||
 * **April** ||  ||   || **May** ||   ||   || **June** ||   ||   || **July** ||   ||
 * Start-up cash (Earnings last month) || 7,173 ||  || Start-up cash (Earnings last month) || 5,518 ||   || Start-up cash (Earnings last month) || 4,194 ||   || Start-up cash (Earnings last month) || 3,136 ||
 * Sales (to be paid back 50% one month period and 50% two month period) || 9,100 ||  || Sales (to be paid back 50% one month period and 50% two month period) || 9,100 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 9,100 ||   || Sales (to be paid back 50% one month period and 50% two month period) || 9,100 ||
 * Cost of goods produced || 4,240 ||  || Cost of goods produced || 4,240 ||   || Cost of goods produced || 4,240 ||   || Cost of goods produced || 4,240 ||
 * Expenses ||  ||   || Expenses ||   ||   || Expenses ||   ||   || Expenses ||   ||
 * Mold 1 || 0 ||  || Mold 1 || 0 ||   || Mold 1 || 0 ||   || Mold 1 || 0 ||
 * Admin expenses || 4,315 ||  || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||   || Admin expenses || 4,315 ||
 * Depreciation || 820 ||  || Depreciation || 820 ||   || Depreciation || 820 ||   || Depreciation || 820 ||
 * Warehouse || 0 ||  || Warehouse || 0 ||   || Warehouse || 0 ||   || Warehouse || 0 ||
 * Earnings before tax || 6,898 ||  || Earnings before tax || 5,243 ||   || Earnings before tax || 3,919 ||   || Earnings before tax || 2,861 ||
 * Tax || 1,380 ||  || Tax || 1,049 ||   || Tax || 784 ||   || Tax || 572 ||
 * Earnings after tax || 5,518 ||  || Earnings after tax || 4,194 ||   || Earnings after tax || 3,136 ||   || Earnings after tax || 2,288 ||
 * Depreciation || 820 ||  || Depreciation || 820 ||   || Depreciation || 820 ||   || Depreciation || 820 ||
 * Warehouse || 0 ||  || Warehouse || 0 ||   || Warehouse || 0 ||   || Warehouse || 0 ||
 * Earnings before tax || 6,898 ||  || Earnings before tax || 5,243 ||   || Earnings before tax || 3,919 ||   || Earnings before tax || 2,861 ||
 * Tax || 1,380 ||  || Tax || 1,049 ||   || Tax || 784 ||   || Tax || 572 ||
 * Earnings after tax || 5,518 ||  || Earnings after tax || 4,194 ||   || Earnings after tax || 3,136 ||   || Earnings after tax || 2,288 ||
 * Earnings after tax || 5,518 ||  || Earnings after tax || 4,194 ||   || Earnings after tax || 3,136 ||   || Earnings after tax || 2,288 ||
 * Earnings after tax || 5,518 ||  || Earnings after tax || 4,194 ||   || Earnings after tax || 3,136 ||   || Earnings after tax || 2,288 ||


 * 1) Prepare income statements and balance sheets for the three sales assumptions.
 * |||||||| **Projected Income Statement** ||
 * |||||||| **For the year ending July 31, 1995** ||
 * || 10000/month || 30000/month || 5000/month ||  ||
 * Sales (total quantity*$4.30) || $516,000.00 || $1,548,000.00 || $258,000.00 ||  ||
 * **Operating Expenses:** ||  ||   ||   ||   ||
 * Administrative Exp ($4315*12) || $51,780.00 || $51,780.00 || $51,780.00 ||  ||
 * Warehouse rent ($230*12) || $0.00 || $2,760.00 || $0.00 ||  ||
 * Promotional expenses (500*$1.292*4) || $2,584.00 || $2,584.00 || $2,584.00 ||  ||
 * Total Operating Expenses || $54,364.00 || $57,124.00 || $54,364.00 ||  ||
 * Income before tax || $461,636.00 || $1,490,876.00 || $203,636.00 ||  ||
 * Taxes (20%) || $92,327.20 || $298,175.20 || $40,727.20 ||  ||
 * Net Income After Tax || $369,308.80 || $1,192,700.80 || $162,908.80 ||  ||
 * |||||| **Projected Balance Sheet** ||  ||
 * |||||| **As at July 31, 1995** ||  ||
 * || 10000/month || 30000/month || 5000/month ||  ||
 * **Assets** ||  ||   ||   ||   ||
 * Current Assets: ||  ||   ||   ||   ||
 * Cash || $41,400.00 || $41,400.00 || $41,400.00 ||  ||
 * Inventory || $172,000.00 || $172,000.00 || $172,000.00 ||  ||
 * A/C Receivable (paid 50% in 30 days and remaining later) || $109,200.00 || $436,800.00 || $382,200.00 ||  ||
 * Total Current Assets || $322,600.00 || $650,200.00 || $595,600.00 ||  ||
 * Fixed Assets || $32,795.00 || $32,795.00 || $32,795.00 ||  ||
 * Minus office equipt depreciation || $120.00 || $120.00 || $120.00 ||  ||
 * Minus wear and tear mold depreciation || $1,450.00 || $4,350.00 || $725.00 ||  ||
 * Minus mold, tools, dies depreciation || $170.00 || $510.00 || $85.00 ||  ||
 * || $31,055.00 || $27,815.00 || $31,865.00 ||  ||
 * Total Assets || $291,545.00 || $622,385.00 || $563,735.00 ||  ||
 * **Liabilities and Shareholder's Equity** ||  ||   ||   ||   ||
 * Current Liabilities ||  ||   ||   ||   ||
 * A/C Payable || $5,150.00 || $15,450.00 || $2,575.00 ||  ||
 * Taxes Payable || $92,327.20 || $298,175.20 || $40,727.20 ||  ||
 * Total Current Liabilities || $97,477.20 || $313,625.20 || $43,302.20 ||  ||
 * Shareholder's Equity ||  ||   ||   ||   ||
 * Common Stocks || $85,000.00 || $85,000.00 || $85,000.00 ||  ||
 * Retained Earnings || $198,454.40 || $610,150.40 || $95,254.40 ||  ||
 * Total Shareholder's equity || $283,454.40 || $695,150.40 || $180,254.40 ||  ||
 * Total Liabilities and Shareholder's Equity || $380,931.60 || $1,008,775.60 || $223,556.60 ||  ||
 * Shareholder's Equity ||  ||   ||   ||   ||
 * Common Stocks || $85,000.00 || $85,000.00 || $85,000.00 ||  ||
 * Retained Earnings || $198,454.40 || $610,150.40 || $95,254.40 ||  ||
 * Total Shareholder's equity || $283,454.40 || $695,150.40 || $180,254.40 ||  ||
 * Total Liabilities and Shareholder's Equity || $380,931.60 || $1,008,775.60 || $223,556.60 ||  ||

3. As Dale Reid, would you invest in Chef’s Toolkit? If so, under what terms?

The pasta server is clearly a brilliant and innovative idea that could be hugely profitable. Dale Reid is in a position to take a calculated risk on the success of the concept, and reap the rewards if it is successful. Given the strength of the concept, he should invest in Chef's Toolkit. If I were in Daniel Reid's position, I would take the position of a silent investor, and give the Jefferys the freedom and flexibility to run the company as they see fit. They have a well thought out business model with consideration for their competition, and a marketing strategy that can take them global. I would, however, ensure that I retained 50% ownership in order to have a say in dividends and major merger and acquisition deals so as to protect my stake in the company. In the event that Peter and Sally do not approve the investment at the 50% level, I would offer a higher amount before I would accept a lower stake in the company. If the Jefferys were dead set against sharing control, I would place a value of $20,000 on the half ownership of the company, and therefore offer at most $65,000 for a 49% stake. In addition to offering a lower price, I would demand that a minimum of 10% of net profits be distributed as dividends.