MAT 116 Week 2: Assignment Analysis
Axia College Material
MAT 116 Week 2 Application Assignment
Name:
Score: c/50
Starting a Business
Work must be shown for full credit.
Equation Editor must be used where necessary. See your Procedures document for further information.
Be sure to save your document as a Word Document so that graph and equation objects are not converted to images. Images are equivalent to scans and are not acceptable in place of equation editor objects.
Reduce all fractions to lowest terms.
Each question is worth 5 points.
First, save this file to your hard drive by selecting Save As from the File menu. Click the white space below each question to maintain proper formatting
Starting your own business can be exciting and daunting at …show more content…
the same time. Typically, a business plan is required to seek additional funding. A plan is also a valuable tool for establishing a budget and for gauging your success in your enterprise. During this activity, you will apply the skills from Ch. 1 & 2 to deal with some of the requirements in writing a good business plan.
Suppose you wish to open a small gift shop. You will need a location, an inventory of gifts, and employees. You need to consider that you must gross enough to purchase inventory, pay rent, expenses and salaries. In addition, you must gross enough to pay yourself a salary and to pay off any loans.
An initial study results in these preliminary figures:
Personal salary:
$36,000 per year
Annual budget for gift inventory:
$55,000 first year, $86,000 beginning yr 2
Expenses, including rent, utilities and operation expenses:
$13,000 per year
Employees:
2 at $24,000 each
Answer the following questions. Use Equation Editor when writing mathematical expressions or equations. First, save this file to your hard drive by selecting Save As from the File menu. Enter your work and your answer in the left box under the question. You must show work for full credit.
1. What is the total amount of funds required to set up initially? Consider the inventory, expenses, and the first year expenses and salaries for yourself and your employees.
Work and Answer
Instructor Comments
Personal Salary
$36,000.00
Employee
$24,000.00
Employee
$24,000.00
Inventory (1st Yr)
$55,000.00
Expenses
$13,000.00
$152,000.00
2. You plan to stock your store with gifts in three general categories:
Your standard inventory will include tee-shirts and souvenirs, and comprise about 50% of your inventory. In addition, you plan to carry 30% of your inventory as novelty gifts, and 20% as seasonal items. How much is budgeted for each category for year 1? Round to the nearest dollar.
Work and Answer
Instructor Comments
55000.00*.50=27500.00
55000.00*.30=16500.00
55000.00*.20=11000.00
Total: 55,000.00
3. How much will you have to borrow to have enough to set up and cover your inventory and expenses (except salaries) for the first year?
Work and Answer
Instructor Comments
55000.00+13000.00=68000.00
4. The loan must be repaid in 10 years. The interest is 10% of the total loan. The bank has allowed you to begin annual payments in year 2, so you will have to pay the entire amount plus interest in 9 years, beginning in year 2. How much will your annual loan payment be for each of those 9 years? Round to the nearest $100.
Work and Answer
Instructor Comments
68000*.10=6800
6800*10=68000
68000+68000=136000
136000/9=15100.00
Answer is - $15100.00
5. Your family is able to contribute $10,000 to start the business. This contribution does not have to be repaid. In the first year, your business must earn enough to cover salaries. Afterwards, you must earn enough to cover salaries, inventory and all expenses, including the loan payment. In order to pay salaries, including your own, minus the family gift, what must your gross sales total in the first year? What must you gross in year 2? Round to the nearest $1,000.
Work and Answer
Instructor Comments
First Year: 36000+24000+24000=84000-10000=74000
Second Year Salaries: 36000+24000+24000=84000
84000+15100+86000+13000=198100
Second year needs $198100.00
6. In year 5, you are hoping to add another employee and increase your total inventory budget again by $25%.. At that time, you expect that you will raise employee salaries to $27,000 and your own salary to $40,000. Considering no increases in operational expenses, how much will you have to gross in order to pay all expenses, the loan payment, and all salaries? Round to the nearest $100.
Work and Answer
Instructor Comments
Personal Salary
$36,000.00
$40,000.00
Employee
$24,000.00
$27,000.00
Employee
$24,000.00
$27,000.00
Employee
$24,000.00
$27,000.00
Inventory (2nd Yr)
$86,000.00
*.25
$107,500.00
Expenses
$13,000.00
$13,000.00
Loan
$15,100.00
$15,100.00
$256,600.00
7.
“Markup” is a term used for how retail price is calculated from the wholesale price. The following formula expresses this relationship:
R = (M+1)W Where R is the retail price, M is the markup and W is the wholesale price. For example, if an item wholesales for $4, and you apply a 50% markup, the item would retail for R = (0.5 + 1)(4) = $6.00
To find the markup required to achieve a given retail price from a given wholesale price, the formula is rearranged to
What is the markup you must apply to your initial inventory to meet your gross target in year 1? Use your result from #5. Round your answer to the nearest percent.
Work and Answer
Instructor Comments
Yr 1 Inventory
$55,000.00
Gross Salaries 1st yr
$84,000.00
Expenses
$13,000.00
No Loan
Less Loan amount
($68,000.00)
$84,000.00
Need $ (Retail Value)
$84,000.00
Inventory (Wholesale Value)
$55,000.00
Formula
M=(R/W)-1
=(84000/55000)-1
Markup equals: …show more content…
53%
8. What will your markup be in year 2 when you must cover the inventory, expenses, salaries and begin repaying the loan? Round your answer to the nearest percent.
Work and Answer
Instructor Comments
Inventory Yr 2
$86,000.00
Total Gross for yr 2
$198,100.00
Formula
M=(R/W)-1
130%
9.
You are considering several different locations, so your total expenses may be different than the value found in problem 1. You are also considering changing the number of employees to start. Using the year 1 inventory and the personal and employee salary figures from the table of preliminary figures, but using E for the total expenses (expenses, rent, utilities and operational expenses) instead of the value from the table, and n for the number of employees, write a general algebraic expression that expresses your total year one costs. Simplify the expression. Evaluate the expression for a total expense value of $12,000 and 3
employees.
Work and Answer
Instructor Comments
Inventory (1st Yr)
$55,000.00
Personal Salary
$36,000.00
Employee
$24,000.00
Employee
$24,000.00
Expression
55000+36000+E+n(24000)
=55000+36000+12000+3(24000)
Simplified
103000+72000
$175,000.00
10. You decide to add advertising to your initial startup budget. After investigating costs, you determine that your monthly advertising will be $1,400 and according to the following table. Complete the table. Round your answers to the nearest dollar and to nearest tenth of a percent.
Category
Cost
Percentage of advertising budget
Radio
$200
Newspaper
30.0%
Signs
$180
Brochures
25.0%
Other
Work and Answer
Instructor Comments
Advertising Budget $1,400.00
Cost
Percentage
Radio
$200.00
14%
=200/1400
Newspaper
$420.00
30%
=1400*0.3
Signs
$180.00
13%
=180/1400
Brochures
$350.00
25%
=1400*.25
Other
$250.00
18%
=1400-1150
Totals
$1,400.00
100%
=250/1400
Rubric for Appendix Questions
The answer fully and correctly addresses all parts of the question. The Equation Editor is used where necessary. All work is shown. The response contains no spelling or capitalization errors and no grammar errors. The response adheres to APA standards in citation and use of all references
Full credit
The answer incorrectly answers the question. The Equation Editor is used where necessary. All work is shown.
Partial credit
The answer incorrectly answers the question or the Equation Editor is not used. Work is shown and contains only minor errors.
Partial credit
1 point will be deducted for failure to use the Equation Editor as appropriate.
The answer incorrectly answers the question and no work is shown.
0 -50% Credit
(-20% for 1 day late, -50% for 2 days late. After 2 days late, the Application Assignment cannot be accepted for grade. I am willing, however to mark it for feedback.)
MAT 116 Week 2 Application Assignment
Name:
Score: c/50
Starting a Business
Work must be shown for full credit.
Equation Editor must be used where necessary. See your Procedures document for further information.
Be sure to save your document as a Word Document so that graph and equation objects are not converted to images. Images are equivalent to scans and are not acceptable in place of equation editor objects.
Reduce all fractions to lowest terms.
Each question is worth 5 points.
First, save this file to your hard drive by selecting Save As from the File menu. Click the white space below each question to maintain proper formatting
Starting your own business can be exciting and daunting at …show more content…
the same time. Typically, a business plan is required to seek additional funding. A plan is also a valuable tool for establishing a budget and for gauging your success in your enterprise. During this activity, you will apply the skills from Ch. 1 & 2 to deal with some of the requirements in writing a good business plan.
Suppose you wish to open a small gift shop. You will need a location, an inventory of gifts, and employees. You need to consider that you must gross enough to purchase inventory, pay rent, expenses and salaries. In addition, you must gross enough to pay yourself a salary and to pay off any loans.
An initial study results in these preliminary figures:
Personal salary:
$36,000 per year
Annual budget for gift inventory:
$55,000 first year, $86,000 beginning yr 2
Expenses, including rent, utilities and operation expenses:
$13,000 per year
Employees:
2 at $24,000 each
Answer the following questions. Use Equation Editor when writing mathematical expressions or equations. First, save this file to your hard drive by selecting Save As from the File menu. Enter your work and your answer in the left box under the question. You must show work for full credit.
1. What is the total amount of funds required to set up initially? Consider the inventory, expenses, and the first year expenses and salaries for yourself and your employees.
Work and Answer
Instructor Comments
Personal Salary
$36,000.00
Employee
$24,000.00
Employee
$24,000.00
Inventory (1st Yr)
$55,000.00
Expenses
$13,000.00
$152,000.00
2. You plan to stock your store with gifts in three general categories:
Your standard inventory will include tee-shirts and souvenirs, and comprise about 50% of your inventory. In addition, you plan to carry 30% of your inventory as novelty gifts, and 20% as seasonal items. How much is budgeted for each category for year 1? Round to the nearest dollar.
Work and Answer
Instructor Comments
55000.00*.50=27500.00
55000.00*.30=16500.00
55000.00*.20=11000.00
Total: 55,000.00
3. How much will you have to borrow to have enough to set up and cover your inventory and expenses (except salaries) for the first year?
Work and Answer
Instructor Comments
55000.00+13000.00=68000.00
4. The loan must be repaid in 10 years. The interest is 10% of the total loan. The bank has allowed you to begin annual payments in year 2, so you will have to pay the entire amount plus interest in 9 years, beginning in year 2. How much will your annual loan payment be for each of those 9 years? Round to the nearest $100.
Work and Answer
Instructor Comments
68000*.10=6800
6800*10=68000
68000+68000=136000
136000/9=15100.00
Answer is - $15100.00
5. Your family is able to contribute $10,000 to start the business. This contribution does not have to be repaid. In the first year, your business must earn enough to cover salaries. Afterwards, you must earn enough to cover salaries, inventory and all expenses, including the loan payment. In order to pay salaries, including your own, minus the family gift, what must your gross sales total in the first year? What must you gross in year 2? Round to the nearest $1,000.
Work and Answer
Instructor Comments
First Year: 36000+24000+24000=84000-10000=74000
Second Year Salaries: 36000+24000+24000=84000
84000+15100+86000+13000=198100
Second year needs $198100.00
6. In year 5, you are hoping to add another employee and increase your total inventory budget again by $25%.. At that time, you expect that you will raise employee salaries to $27,000 and your own salary to $40,000. Considering no increases in operational expenses, how much will you have to gross in order to pay all expenses, the loan payment, and all salaries? Round to the nearest $100.
Work and Answer
Instructor Comments
Personal Salary
$36,000.00
$40,000.00
Employee
$24,000.00
$27,000.00
Employee
$24,000.00
$27,000.00
Employee
$24,000.00
$27,000.00
Inventory (2nd Yr)
$86,000.00
*.25
$107,500.00
Expenses
$13,000.00
$13,000.00
Loan
$15,100.00
$15,100.00
$256,600.00
7.
“Markup” is a term used for how retail price is calculated from the wholesale price. The following formula expresses this relationship:
R = (M+1)W Where R is the retail price, M is the markup and W is the wholesale price. For example, if an item wholesales for $4, and you apply a 50% markup, the item would retail for R = (0.5 + 1)(4) = $6.00
To find the markup required to achieve a given retail price from a given wholesale price, the formula is rearranged to
What is the markup you must apply to your initial inventory to meet your gross target in year 1? Use your result from #5. Round your answer to the nearest percent.
Work and Answer
Instructor Comments
Yr 1 Inventory
$55,000.00
Gross Salaries 1st yr
$84,000.00
Expenses
$13,000.00
No Loan
Less Loan amount
($68,000.00)
$84,000.00
Need $ (Retail Value)
$84,000.00
Inventory (Wholesale Value)
$55,000.00
Formula
M=(R/W)-1
=(84000/55000)-1
Markup equals: …show more content…
53%
8. What will your markup be in year 2 when you must cover the inventory, expenses, salaries and begin repaying the loan? Round your answer to the nearest percent.
Work and Answer
Instructor Comments
Inventory Yr 2
$86,000.00
Total Gross for yr 2
$198,100.00
Formula
M=(R/W)-1
130%
9.
You are considering several different locations, so your total expenses may be different than the value found in problem 1. You are also considering changing the number of employees to start. Using the year 1 inventory and the personal and employee salary figures from the table of preliminary figures, but using E for the total expenses (expenses, rent, utilities and operational expenses) instead of the value from the table, and n for the number of employees, write a general algebraic expression that expresses your total year one costs. Simplify the expression. Evaluate the expression for a total expense value of $12,000 and 3
employees.
Work and Answer
Instructor Comments
Inventory (1st Yr)
$55,000.00
Personal Salary
$36,000.00
Employee
$24,000.00
Employee
$24,000.00
Expression
55000+36000+E+n(24000)
=55000+36000+12000+3(24000)
Simplified
103000+72000
$175,000.00
10. You decide to add advertising to your initial startup budget. After investigating costs, you determine that your monthly advertising will be $1,400 and according to the following table. Complete the table. Round your answers to the nearest dollar and to nearest tenth of a percent.
Category
Cost
Percentage of advertising budget
Radio
$200
Newspaper
30.0%
Signs
$180
Brochures
25.0%
Other
Work and Answer
Instructor Comments
Advertising Budget $1,400.00
Cost
Percentage
Radio
$200.00
14%
=200/1400
Newspaper
$420.00
30%
=1400*0.3
Signs
$180.00
13%
=180/1400
Brochures
$350.00
25%
=1400*.25
Other
$250.00
18%
=1400-1150
Totals
$1,400.00
100%
=250/1400
Rubric for Appendix Questions
The answer fully and correctly addresses all parts of the question. The Equation Editor is used where necessary. All work is shown. The response contains no spelling or capitalization errors and no grammar errors. The response adheres to APA standards in citation and use of all references
Full credit
The answer incorrectly answers the question. The Equation Editor is used where necessary. All work is shown.
Partial credit
The answer incorrectly answers the question or the Equation Editor is not used. Work is shown and contains only minor errors.
Partial credit
1 point will be deducted for failure to use the Equation Editor as appropriate.
The answer incorrectly answers the question and no work is shown.
0 -50% Credit
(-20% for 1 day late, -50% for 2 days late. After 2 days late, the Application Assignment cannot be accepted for grade. I am willing, however to mark it for feedback.)