Henry’s Laptop Retail and Repair Henry is between jobs right now. He was most recently sitting on the board of an overseas oil and gas company. However, he was underqualified for the position and was eventually let go
Please check attached file. it has to be around 1500 words. Be professional. no plagarisma will allow.
Requirements: 1500 words
Henry’s Laptop Retail and Repair Henry is between jobs right now. He was most recently si«ng on the board of an overseas oil and gas company. However, he was underqualified for the posion and was eventually let go. Since then, Henry has also sold some of his painngs for large sums of money. Henry feels frustrated by ongoing cha©er that he has only done well in his career because of his father, who holds a presgious posion with the federal government. Fortunately, Henry has a new idea. He wants to open a computer retail and repair shop. He recently had a problem with his own laptop repair. ALer dropping his laptop at Eric’s Electronics Repair and neglecng to pick it up, Henry, unfortunately, discovered that some sensive informaon about his personal life had been leaked to the press. Feeling angry about Eric’s lack of professionalism, Henry feels that he can open a more ethical repair shop which will compete with Eric. Henry is asking you for advice on business ethics, specifically which would apply to a computer repair business. Henry has spoken to a friend, Michelle, about this business idea and she has determined that he can feasibly sell eighty-five laptops in his first year of business at an average price of $495 per laptop. Henry has contacted a major computer manufacturer who has quoted him $1,650 for five laptops, $3,150 for ten laptops, or $29,000 for 100 laptops. Michelle also projects one-hundred-and-fiLy laptop repairs in the business’s first year, with each repair priced at $95. On average, a laptop repair would cost Henry $40 in labour costs (he can’t do repairs himself but is hoping he can learn over me), $10 in materials, and $5 in variable overhead costs. Michelle isn’t confident projecng numbers beyond two years but thinks Henry should be able to grow sales and repair numbers by 50% in year two and at least sustain that level in the following years. Michelle has stressed that trend analysis is important. Henry’s addional expenses would be $1,300 a month for rent, $350 a month for ulies, and $200 a month for adversing. Henry plans to use a combinaon of debt and equity financing- he plans to pay interest of $150 a month and dividends totaling $15,000 at the end of the year. Since Henry knows many wealthy businesspeople around the world (mainly through a family friend named Barack), he foresees no issues with ge«ng money- he is planning to just call people and ask them if they want to buy shares or loan money to his new company. Henry is wondering how much money he might be able to withdraw at the end of the business’s first year- he doesn’t want to withdraw any cash which wasn’t technically “profit”. He wants you to prepare, using proper forma«ng, a first-year projected income statement and a statement of retained earnings
for him. Any insight about his projected numbers is greatly appreciated. He is especially interested in a few raos which will help him with important decisions, so he runs a be©er business- he has asked for specific scenarios and explanaons. Henry also wants feedback on his plan to use a combinaon of debt and equity financing. What is an opmal financing mix for a business like his? What specifically should he know about such a decision? Are there any benefits and drawbacks of using equity? What about debt? If the business does well, Henry might consider buying a $30,000 machine which would cut the labor cost of a laptop repair to only $15. The machine can repair an esmated 1,500 laptops before it needs to be replaced. ALer doing some rough math he is not confident in, Henry is wondering if he should buy the machine now instead of waing. He is also not sure how the machine will be depreciated- he wants you to advise him on the best depreciaon method for this situaon and how the informaon will be presented on the income statement and balance sheet. Finally, Henry highly values the local indigenous community and wants to help its members, especially children. He is thinking about gathering volunteer help to produce fiLy laptops to sell to a local school at cost (in the future, he hopes to donate them for free). Henry wants you to explain, in detail, how costs can be tracked for these fiLy laptops, assuming some specialized workers such as supervisors are paid hourly. He also wants you to take into consideraon assembly line worker costs (assuming he can’t find enough volunteers), ulity costs, etc. Be sure to give Henry an idea about the necessary journal entries and other important elements. Henry acknowledges that he has gone through a real struggle in his life but is dedicated to turning things around with an ethical, well-run laptop retail and repair business. In a business memo draLed by yourself (and not anyone else nor arficial intelligence) to him, give Henry detailed advice on all issues raised in the case. Feel free to add general business or life advice which may benefit Henry.
Business Memo Grading Rubric The rubric below will be used to assess the individual case/ business memo due at the mid-point of the ACCT 621 course. Level Needs … ………Improvement Satisfactory Good Excellent Content (15%) Most of the major issues in the case have not been identified in the memo. The analysis doesn’t adequately dissect the issues, nor does it support recommendations. About half of the major issues in the case have been identified in the memo. The analysis dissects some of the issues in the case, but the it is incomplete or incorrect. Most of the issues in the case have been identified and discussed thoroughly in the memo. The issues are dissected well through qualitative and quantitative analysis, tying into solid recommendations. All/nearly all of the issues in the case have been identified and discussed thoroughly in the memo. The issues are dissected well through qualitative and quantitative analysis, tying into solid recommendations. Score: 0-7 8-10 11-13 14-15 Presentation (5%) The memo’s structure needs improvement and some parts may be missing/poorly developed. Significant grammar issues exist. The memo’s structure needs improvement and some parts may be missing/poorly developed. Some grammar issues exist. The memo is well-structured with all necessary elements present and well-developed. There are few/no grammar issues. The memo is well-structured with all necessary elements present and fully developed. There are no grammar issues. Score: 0-2 3 4 5
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