LeAnn Sands wants to conduct operating breakeven analyses of the Salza Technology Corporation for year 2016. Income statement information is shown in Problem 8. For year 2016, the firm’s cost of goods sold is considered to be variable costs and operating expenses are considered to be fixed cash costs. Depreciation expenses in year 2016 also are expected to be fixed costs. Calculate Salza’s EBDAT breakeven in terms of survival revenues for year 2016.
> From the Headlines – The Fantasticks: Describe the fundraising tactic for the producers of The Fantasticks. What were the driving motivations for the angel investors?
> Describe some major characteristics of business angels.
> What is seed and startup financing?
> What are confidential disclosure agreements? What are employment contracts?
> What are copyrights and how are they used?
> What are trademarks? Identify the four types of “marks” used to protect intellectual property.
> What asset and financial bubbles have occurred recently? How can bubbles and financial crises lead to entrepreneurial opportunities?
> What are trade secrets? How are they used to protect valuable intangible assets?
> What are the benefits and costs of having a patent?
> What was the purpose of the Leahy-Smith America Invents Act of 2011? Why is the U.S. Congress working on possible passage of an “Innovation Act?”
> Identify and briefly describe the types of patents used to protect valuable intangible assets.
> Describe the major characteristics of a limited liability company.
> How does a subchapter S corporation differ from a regular corporation?
> Briefly describe the corporate form of business organization. What is meant by limited liability?
> Ricardo Martinez, the founder of the Martinez Products Corporation (see Problem 8), projects sales to double to $400,000 in the second year of operation. A. If the financial ratios calculated for Year 1 remain the same in Year 2, what would be Martinez’s
> Ricardo Martinez has prepared the following financial statement projections as part of his business plan for starting the Martinez Products Corporation. The venture is to manufacture and sell electronic components that make standard overhead projectors
> Refer to the information on the three ventures. A. If each venture had net sales of $10 million, calculate the dollar amount of net profit and total assets for Venture XX, Venture YY, and Venture ZZ. B. Which venture would have the largest dollar amount
> 4. Explain how you would choose between the following situations. Develop your answers from the perspective of the principles of entrepreneurial finance presented earlier in the chapter. You may arrive at your answers with or without making actual calc
> LearnRite.com offers e-commerce service for children’s “edutainment” products and services. The word edutainment is used to describe software that combines “educational” and “entertainment” components. Valuable product information and detailed editorial
> Assume that you have just “run-out-of-money” and are unable to move your “idea” from its development stage to production and the startup stage. However, you remain convinced that with a reasonable amount of additional financial capital you will be a succ
> Jen and Larry’s frozen yogurt venture described in Problem 3 required some investment in bricks and mortar. Initial specialty equipment and the renovation of an old warehouse building in Lower Downtown, referred to as LoDo, cost $450,000 at the beginnin
> In early 2013, Jennifer (Jen) Liu and Larry Mestas founded Jen and Larry’s Frozen Yogurt Company, which was based on the idea of applying the microbrew or micro batch strategy to the production and sale of frozen yogurt. They began producing small quanti
> Following is financial information for three ventures: Venture XX Venture YY Venture ZZ After-tax Profit Margins………………….5%............................15%..............................25% Asset Tu
> What are the major elements of a typical business plan?
> How do the concepts of operating cash flow and free cash flow to equity differ?
> Describe return on assets (ROA). What are the two major components of the ROA model?
> Describe the factor categories used by venture capitalists and other venture investors when they screen venture opportunities for the purpose of deciding to invest.
> Describe the characteristics of a viable venture opportunity. What is a VOS Indicator?
> Why do businesses close or cease operating? What are the primary reasons why businesses fail?
> When conducting a qualitative screening of a venture opportunity, whom should you interview? What topics should you cover?
> Describe how a SWOT analysis can be used to conduct a first-pass assessment of whether an idea is likely to become a viable business opportunity.
> Time to market is generally important, but being first to market does not necessarily ensure success. Explain.
> Describe and discuss some of the best financial practices of high growth, high performance firms. Why is it also important to consider production or operations practices?
> Identify some of the best marketing and management practices of high growth, high performance firms.
> Describe the differences between entrepreneurial ventures and other entrepreneurial firms.
> Identify three types of startup firms.
> From the Headlines—Diluting the Angels’ Share: Briefly describe how the idea of a shortened aging process can be the basis of financial profitability for Cleveland Whiskey.
> What are real options? What types of real option opportunities are available to entrepreneurs?
> From the Headlines—Ice Energy: Briefly describe the “ice battery” market and how Ice Energy’s Ice Bear system addresses that market. Give some examples of how Ice Energy can expand its market and tap additional sources of capital.
> Web-surfing exercise: Develop your own list of the five most important societal or economic trends currently shaping our society and providing major business opportunities. Use the Web to generate potential venture ideas related to the trends and to gat
> What is a business plan? Why is it important to prepare a business plan?
> Identify the major sources, as well as the players, associated with each type of financing for each life cycle stage.
> How do asset intensity and asset turnover differ? What is implied by a high asset intensity?
> Let’s assume that Phil Young does indeed develop and successfully market the Pedal Pusher product discussed in Problems 1 and 6. Phil’s venture will purchase materials for making the product from others, assemble the products at the Pedal Pusher venture
> Phil Young, founder of Pedal Pushers, expects to spend the next one-half year developing and testing prototypes for a pedal replacement for children’s bicycles. (See Part A of Problem 1 for a description of the proposed product.) Phil anticipates payin
> What is entrepreneurial finance and what are the responsibilities of the financial manager of an entrepreneurial venture?
> Access the Nolo Press Web site at http://www.nolo.com, and other publishers’ Web sites, and identify software products designed to help the young venture with its legal and accounting problems.
> Access the Small Business Administration Web site at http://www.sba.gov and find information on estimating start-up costs, preparing financial statements, and conducting breakeven analysis.
> A number of Web sites are available to help young ventures to measure their financial performance and to help them when they are growing and “ramping up” revenues. Access the http://money.cnn/magazines/business2/ Web site and identify sources helpful to
> LeAnn Sands has reason to believe that year 2017 will be a replication of year 2016 except that cost of goods sold are expected to be 65 percent of the estimated $450,000 in revenues. Other income statement relationships are expected to remain the same
> What are the three internal operating schedules that most firms must prepare?
> Define the term “EBIT.” How does EBIT differ from a firm’s net income or net profit?
> Briefly discuss the likely importance of an entrepreneur’s character and reputation on the success of a venture. What role does social responsibility plan in the operation of an entrepreneurial venture?
> What does an income statement measure or track over time?
> What types of liabilities might show up on a venture’s balance sheet?
> What is meant by the terms “depreciation” and “accumulated depreciation”?
> Briefly describe the typical types of accounts that are found in the current assets of a new venture.
> What is accrual accounting? What are generally accepted accounting principles (GAAP)?
> What is meant by breakeven drivers? Identify two important drivers affecting the amount of revenues needed for ventures to break even.
> Describe and illustrate how an EBDAT (survival) breakeven chart is constructed.
> Describe the meaning of EBDAT breakeven and survival revenues.
> Define the term EBDAT.
> What is a venture’s contribution profit margin?
> From an agency relationship standpoint, describe the possible types of problems or conflicts of interest that could inhibit maximizing a venture’s value.
> Define the term EBITDA.
> Describe the differences between variable expenses and fixed expenses.
> What is meant by net cash build and net cash burn?
> Briefly describe what is meant by a statement of cash flows.
> Access the Web sites of http://www.angeldeals.com, http://gatheringofangels.com, and http://www.vcfodder.com. Determine the scope and focus of these sites in terms of matchmaking financing services that are available for entrepreneurs.
> Access the http://www.garage.com Web site. Identify the angel matchmaking services that are provided. Determine the site’s focus in terms of early stage versus later stage financing, as well as the typical range of financing that is provided.
> Access the Inc. magazine Web site at http://www.inc.com. Identify a list of recent articles that relate to how to finance new ventures.
> What is meant by the term “intellectual property”?
> Describe the major taxation advantages of a limited liability company or a subchapter S corporation over a regular corporation.
> What is a limited partnership?
> What is the financial goal of the entrepreneurial venture? What are the major components for estimating value?
> What is first-round financing that occurs during the survival life cycle stage?
> Describe the meaning of financial bootstrapping.
> Describe the major differences between a proprietorship and a partnership.
> Access the Center for business Planning Web site at: www.businessplans.org. Find the reference to PlanWrite which is designed to help an entrepreneur to create a business plan. Identify and briefly describe what this software product provides.
> Describe the life cycle approach for teaching entrepreneurial finance.
> Access the Center for Business Planning Web site at www.businessplans.org. The site provides examples of business plans prepared by MBA students from top business schools and presented to panels of investors at recent Moot Corp. competitions hosted by th
> Identify the types of financing that typically coincide with each stage of a successful venture’s life cycle.
> New ventures are subject to periodic introspection on whether they should continue or abandon. Explain the types of information you would expect to gather and how it would be used in each stage to aid an entrepreneur’s approach to the venture’s future.
> What are the five stages in the life-cycle of a successful venture?
> Access the Inc. magazine Web site at www.inc.com. Identify a list of recent articles that relate to how business opportunities are evaluated by venture investors and/or articles discussing why venture investors chose not to invest in potential business o
> Interact Systems, Inc. has developed software tools that help hotel chains solve application integration problems. Interact’s Application Integration Server (AIS) provides a two-way interface between central reservations systems (CRS) and property manag
> The following ventures are at different stages in their life cycles. Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing. A. Phil Young, foun
> Elmer’s Fudge Factory is planning to open 10 retail outlets in Oregon over the next 2 years. Identify (and weight) those factors relevant to the decision. Provide this list of factors and weights.
> Courtney Kamauf schedules production of a popular Rustic Coffee Table at Kamauf Enterprises, Inc. The table requires a top, four legs, 18 gallon of stain, 1 16 gallon of glue, 2 short braces between the legs and 2 long braces between the legs, and a bras
> Coleman Rich, Ltd., has received the following orders: The entire fabrication for these units is scheduled on one machine. There are 2,250 usable minutes in a week, and each unit will take 65 minutes to complete. Develop a capacity plan, using lot spli
> Karl Knapps, Inc., has received the following orders: The entire fabrication for these units is scheduled on one machine. There are 2,250 usable minutes in a week, and each unit will take 65 minutes to complete. Develop a capacity plan, using lot split
> Using your answers for the lot sizes computed in Problems 14.22, 14.23, and 14.24, which is the best technique and why? Data Table for Problems 14.22 through 14.25* 1 2 3 4 5 6 7 8 9 10 11 12 PERIOD Gross requirements 30 40 30 70 20 10 80 50 *Holding
> Develop a lot-for-lot solution and calculate total relevant costs for the data in the preceding table. Data Table for Problems 14.22 through 14.25* 1 2 3 4 5 6 7 8 9 10 11 12 PERIOD Gross requirements 30 40 30 70 20 10 80 50 *Holding cost = $2.50/uni
> You are product planner for product A (in Problem 14.14 and Figure 14.14). The field service manager, Al Trostel, has just called and told you that the requirements for B and F should each be increased by 10 units for his repair requirements in the field
> A part structure, lead time (weeks), and on-hand quantities for product A are shown in Figure 14.14. From the information shown, generate: a) An indented bill of material for product A (see Figure 5.9 in Chapter 5 as an example of a BOM). b) Net requirem
> Electro Fans has just received an order for one thousand 20-inch fans due week 7. Each fan consists of a housing assembly, two grills, a fan assembly, and an electrical unit. The housing assembly consists of a frame, two supports, and a handle. The fan a
> Given the product structure, master production schedule, and inventory status in Figure 14.13 on the next page and assuming the requirements for each BOM item is 1: a) develop a gross requirements plan for Item C; b) develop a net requirements plan for I
> Lake Charles Seafood makes 500 wooden packing boxes for fresh seafood per day, working in two 10-hour shifts. Due to increased demand, plant managers have decided to operate three 8-hour shifts instead. The plant is now able to produce 650 boxes per day.
> a) Given the product structure and master production schedule (Figure 14.12 below), develop a gross requirements plan for all items. b) Given the preceding product structure, master production schedule, and inventory status (Figure 14.12), develop a net
> Refer again to Problems 14.5 and 14.7. In addition to 100 units of S, there is also a demand for 20 units of U, which is a component of S. The 20 units of U are needed for maintenance purposes. These units are needed in week 6. Modify the net material re
