FIN375 Wk 4 Team – Selecting a Business Location Presentation
by adminin FIN/375(J) on December 8, 2020Choose Your Desired Option(s)
Purpose of Assignment
Successful small business owners look to others for counsel on important business decisions. In this assignment you will work with your in-class counsel (learning team) to come up with ideas, calculate risks, and contemplate opportunities related to choosing a location for your business operations.
Your company is thinking about purchasing a small, successful business. You have two choices: Small Business A or Small Business B. The purchase price of each business is $250,000 (and you cannot spend more than that, so acquiring both is not an option).
Review the following data:
Small Business A:
Revenue = $100,000 in year one, increasing by 10% each year.
Expenses = $20,000 in year one, increasing by 15% each year.
Depreciation Expense = $5,000 each year.
Tax Rate = 25%
Discount Rate = 10%
Small Business B:
Revenue = $150,000 in year one, increasing by 8% each year.
Expenses = $60,000 in year one, increasing by 10% each year
Depreciation Expense = $10,000 each year
Tax Rate = 25%
Discount Rate = 11%
Calculate using financial analysis tools determine which company would be the better investment. Note NPV is always the best method.
Assignment Steps
Identify the key factors to be considered when it comes to choosing a business location.
Analyze how models such as Reilly’s Law of retail gravitation can affect understanding the competition and financial success.
Create a team presentation of 25 slides in total with appropriate references in which you outline the key factors you used to select a business location. Explain why the choice of location can make or break a business, and analyze how capital budgeting impacts location in both the short and long run.
Submit the presentation.
Note: For presentations, you may use any presentation software of your choice.
This assignment contains a Microsoft PowerPoint document.
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