Entrepreneurial Finance
Instructions.
The project should be in one excel file. Problems 2-9 should be solved in one worksheet. Problem 1 requires 3 worksheets.
I will not accept files that are protected (I need to review your cells).
You should create your own templates for each problem.
For the Solver problems, please write down the options and constraints that you used to solve the problem. Follow the format of the instructions that appear on the worksheets that we did in class.
A’s Supermarket is determined to please its customers with a customer advantage card. Currently, 30 percent of all shoppers are loyal to A’s. A loyal A’s customer shops at A’s 80 percent of the time. An unloyal A’s customer shops at A’s 10 % of the time. A typical customer spends $140 per week, and A’s is running on a 4 percent profit margin.
The customer advantage card will cost A’s an average of $0.01 per dollar spent. You believe A’s share of loyal customers will increase by an unknown amount between 2 percent and 10 percent. You also believe that the fraction of the time a loyal customer shops at A’s will increase by an unknown amount between 2 percent and 12 percent. Should A’s adopt a customer advantage card? Should A’s adopt the card if its profit margin is 8 % instead of 4 %?
Utilize a what-if table to determine your answer. Do a worksheet for base case, another worksheet for card with 4% profit margin, and another worksheet for card with 8% profit margin. Hint: Use the example in class of DVD purchasing and adoption of free maintenance policy.
An appliance store sells DVDs. Annual demand is estimated at 950 units. The cost to carry a DVD in inventory for one year is $500, and the cost to place an order for DVDs is $400:
How many DVDs should be ordered each time an order is placed?
How many orders per year should be placed?
What are the annual inventory and ordering costs?
Hint: Refer to the Economic Order Quantity Formula
Use the Goal Seek command to solve the…