You have been hired to help a well-known artist to commercialize her oil and acrylic paintings. Your client has never worked in industry since leaving art college, having been funded by academic grants, and has very little understanding of how to develop a business that captures the true value of her artistic creations. In fact, she admits to you that she does not know one thing about running a business and asks you to define what you can do for her company. Specifically, she has a number of queries that she feels are important to understand before going forward:
1 As a financial manager, what will be your main activities in her new company? (12 marks)
2 What will be your first priority? Explain. (12 marks)
3 Will the company need to invest money? Explain. (12 marks)
4 Will the company need financing? Explain. (12 marks)
5 How will the company raise financing? Is it sensible to list the company on the stock market or issue debt? What about bank loans? (12 marks)
6 What are the benefits of holding cash? (12 marks)
7 What should be the goal of the company? (12 marks)
8 The artist has said to you that she does not wish to run a company that does not contribute to society. She asks whether it is sensible to run a company that donates 10 per cent of all profits to good causes. She asks you whether this is a sensible objective and, if not, are there other options to contribute to society? Explain your view in a way she can easily understand. (16 marks)