Finance for manager Essay Example | Topics and Well Written Essays - 2500 words

Finance for manager - Essay Example In the initial three (3) year period the market will be restricted to only a few suppliers but this will change thereafter as the market will be opened to other suppliers. This means that care should be taken to ensure that the company does not invest in too large a capacity which may not be necessary later. There are two options available to Steelbeam. The company can either choose option 1 – which involves investing in capital with a limited capacity to produce a maximum of 1,000 units (small capacity) or option 2 with the capacity to produce a maximum of 4,000 units (large capacity). These alternatives have different variable cost per unit with the large capacity project having the lowest variable cost per unit and the small capacity project the highest variable cost. In assessing the two options the company has to pay attention to the contribution that both projects make to fixed cost as well as the break even point in units. Additionally, every capital budgeting decision requires the use of capital budgeting techniques in order to make a determination of which option is more advantageous to the company. The techniques available to your company include: ENPV is calculated using the figures obtained from the pessimistic, most likely and optimistic market forecast while applying the formula used in project evaluation and review technique (PERT). This technique assumes that the estimates of sales and demand activity follow a probability distribution (See Heizer and Render 2006). The expected sales and demand are found through the application of weights to the three estimates in each case – of demand and sales, as follows: The information arrived at from the computations suggests that the expected annual demand is 6,333 units and the expected selling price per unit - Â £12,167. These figures can be used to determine which option is better for Steelbeam PLC. Each option will be assessed to determine its

Promotional Analysis Research Paper Example | Topics and Well Written Essays - 2000 words

Promotional Analysis - Research Paper Example The area of the business is strategically located in order for its esteemed customers to access quickly. Because the store also has a high volume of individuals, it is situated in the center of the city and a very spacious locality. Due to greater demand for perfume across the world, the idea of note fragrance came into being. Moreover, the availability of materials as well as skilled labor required producing the product enhanced product generation, also there the high demand for quality and affordable fragrance perfumes boosted the business idea in its existence. Like any other business, the owners of note fragrance had an intention of making profit and employment generation to individuals around the world. In addition, strategic location of the company as well-advanced marketing strategies that are E-marketing among other online services boosted the Idea of generating the Note fragrance store. The business also requires little capital start as cheap and readily labor contributes in one way to another for the development of the fragrance shop. The idea of creating my perfumes emerges because passions and interest in perfumes. Apart from enjoying the beautiful scent of the perfume, I join the business for the sake of make profit and try to make ends meet. Due to readily available market for the product and sufficient infrastructure also boosts the need for one to invest heavily in the business. The product also does not only concentrate on particular individuals, but it cuts across to; young and old, men as well as women. Due to high demand and readily available market for the product, it will call for massive production that will increase the volumes of supplies hence meeting the customers demand at any given time across the world. Fragrance oil international limited is one of the major competitors, producing the same product as Note fragrance. In addition, luxury store also sells