1. A group of young entrepreneurs in Antigua is developing a business plan for a landscaping...
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1. A group of young entrepreneurs in Antigua is developing a business plan for a landscaping business - Island Oasis Landscaping. The plan is to start with a single package which will include cutting lawns, removing weeds, and trimming the hedges. To simplify their financial projections, the group uses the costs and prices for the average residential plot size and estimates that the average landscaping package will be sold for $575. The group has identified their startup requirements. They will use the home of one of the entrepreneurs as their base, but will need financing to purchase and convert a shipping container into an office and storage space. The monthly loan payment for the conversion would be $450 per month. Additionally, they will need a loan for the landscaping equipment which they estimate will cost them $300 per month. Finally, they will need a loan for a vehicle which they estimate will cost $800 per month. Operating costs include repairs and maintenance ($25 per job), gas for the powered equipment ($50 per job), gas for the transport vehicle ($200 per month and $25 per job), marketing ($500 per month), utilities ($300 per month) and salaries for 2 permanent employees ($3,000 per month and $200 per job). a) What are the fixed costs for the business? (2 marks) b) What are the variable costs for the business? (hint: all operating costs are not variable costs; and some costs have both a fixed and a variable component) (3 marks) c) What is the revenue function for the business? (2 marks) d) What is the cost function for the business? (3 marks) e) Calculate how many jobs does Island Oasis need to get in order for the business to break even. (5 marks) f) If the company, gets 30 jobs in the first month: i. Calculate the revenue (2 marks) ii. Calculate the cost (2 marks) iii. Calculate the profit (1 mark) 1. A group of young entrepreneurs in Antigua is developing a business plan for a landscaping business - Island Oasis Landscaping. The plan is to start with a single package which will include cutting lawns, removing weeds, and trimming the hedges. To simplify their financial projections, the group uses the costs and prices for the average residential plot size and estimates that the average landscaping package will be sold for $575. The group has identified their startup requirements. They will use the home of one of the entrepreneurs as their base, but will need financing to purchase and convert a shipping container into an office and storage space. The monthly loan payment for the conversion would be $450 per month. Additionally, they will need a loan for the landscaping equipment which they estimate will cost them $300 per month. Finally, they will need a loan for a vehicle which they estimate will cost $800 per month. Operating costs include repairs and maintenance ($25 per job), gas for the powered equipment ($50 per job), gas for the transport vehicle ($200 per month and $25 per job), marketing ($500 per month), utilities ($300 per month) and salaries for 2 permanent employees ($3,000 per month and $200 per job). a) What are the fixed costs for the business? (2 marks) b) What are the variable costs for the business? (hint: all operating costs are not variable costs; and some costs have both a fixed and a variable component) (3 marks) c) What is the revenue function for the business? (2 marks) d) What is the cost function for the business? (3 marks) e) Calculate how many jobs does Island Oasis need to get in order for the business to break even. (5 marks) f) If the company, gets 30 jobs in the first month: i. Calculate the revenue (2 marks) ii. Calculate the cost (2 marks) iii. Calculate the profit (1 mark)
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Island Oasis Landscaping Financial Analysis a Fixed Costs Monthly Loan Payments 450 Conversion 300 E... View the full answer
Related Book For
Canadian Business & the Law
ISBN: 978-0176501624
4th edition
Authors: Dorothy DuPlessis, Shannnon o'Byrne, Steven Enman, Sally Gunz
Posted Date:
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