Problem V- (12 points)

Petes Hardware, a small company, has set up a new office. The table below shows the revenue expected for the first five months of operation, in addition to the costs for office remodeling, etc.

	July	August	September	October	November
REVENUE	$35,000	$36,000	$42,000	$48,000	$57,000
COSTS
Office Remodeling	$25,000	$8,000
Salaries	11,000	12,100	$13,300	$14,600	$16,000
Training	6,000	6,000
Equipment Lease	8,000	8,480	9,000	9,540	10,110
Supplies	3,000	3,150	3,300	3,460	3,630

a) Determine the cash flow and accumulated cash flow for the company.

b) When is Petes expected to show a profit? Explain your answer.

Problem VI- (10 points)

Scientifico, Inc., a manufacturer of precise measuring instruments for scientific purposes, has presented you with a list of criteria that its managers think are probably important in selecting a vendor for computer hardware and software supporting their operations. The criteria are not listed in order of importance.

1. Low price.

2. Precisely written software for engineering applications.

3. Vendor performs routine maintenance on hardware.

4. Training for Scientifico employees.

a. Critique the list of attributes in a paragraph.

b. Using its initial input, help Scientifico, Inc. draw up a more suitable list of criteria for selecting computer hardware and software vendors to purchase from.