Ayesha, Leilani and Shay (ALS)  three friends who met at The College  are thinking of starting a café. Based on their initial analysis, they foresee that they will require $100,000 as an initial investment. 

They look to contribute to the initial investment as follows:

Ayesha will contribute half as much as Leilani, and Leilani will contribute half as much as Shay.

Address the following scenario-based questions:

List three (3) reasons why ALS might want to start their own business.

Help ALS identify three (3) major causes of business failure, providing an example of each

Do you recommend that ALS form a partnership or a company? Justify your answer by outlining two advantages of the business structure that you recommend and two (2) disadvantages of the business structure that your reject?

As business students, ALS will likely prepare the financial statements themselves. What would you tell them about the Accrual Basis Assumption and the Historical Cost Principle  the two accounting principles  used to prepare financial statements? 

What are three (3) potential sources of 'private financing' that ALS can access to raise the $100,000 initial investment? 

1. After a few months of operation, ALS will probably require more money to fulfil their fixed capital and working capital needs.
2. Describe two (2) internal and two (2) external sources of funds that might be suitable for them. In your answer, consider the nature of their business, the intended investment, and the current economic environment.

Do you recommend that ALS form a partnership or a company? Justify your answer by outlining two advantages of the business structure that you recommend and two disadvantages of the business structure that your reject. 

1. As business students, ALS will likely prepare the financial statements themselves. What would you tell them about the Accrual Basis?
2. Assumption and the Historical Cost Principle  the two accounting principles used to prepare financial statements? 

What are three (3) potential sources of 'private financing' that ALS can access to raise the $100,000 initial investment? 

After a few months of operation, ALS will probably require more money to fulfil their fixed capital and working capital needs. Describe two  internal and two (2) external sources of funds that might be suitable for them. In your answer, consider the nature of their business, the intended investment, and the current economic environment.?

Answer rating: 100% (QA)

A List three 3 reasons why ALS might want to start their own business Independence and control over business operations Opportunity to bring unique ideas to life and potentially achieve financial succ... View the full answer