Merlin Facts Essay

Submitted By y2p2001
Words: 499
Pages: 2

TERRITORY 1 - 40% OF U.S. affluent
TERRITORY 2 - 20% OF U.S. UP-SCALE – open to new products
TERRITORY 3 - 40% U.S. BARGAINERS

PRODUCT 1 - CLOCK RADIO ($8.00 COST PER UNIT)
PRODUCT 2 - DVD PLAYER ($20.00 COST PER UNIT)

PRODUCT 1- 3 REGIONS X 3 PEOPLE
PRODUCT 2 - 3 REGIONS X 5 PEOPLE
$5,000 PER QUARTER SALARY PLUS COMMISSION %
COSTS $8,000 TO HIRE AND TRAIN NEW SALESPEOPLE
GENERAL COSTS MARKET RESEARCH
Newspaper Ads (per 1/8 page) 2,500 Per All
Consumer Mag Ads (per 1/4 page) 4,000 Comp Comps
Trade Mag Ads (per 1/2 page) 2,000 Units Sold 200 900
Sales Reps Salary ($/qtr.) 5,000 Price 250 1,000
Sales Reps Hire/Train ($/qtr.) 8,000 Features 750 3,500
Product Base Cost P1 8.00 Quality 750 3,500
Product Base Cost P2 20.00 Web Spending 750 3,500
Inventory Carrying Cost P1 1.00 Newspaper Ads 250 1,000
Inventory Carrying Cost P2 2.00 Consumer Mag Ads 250 1,000
Administrative Expense 50,000 Trade Magazine Ads 250 1,000
Features P1 Mfg. ($/unit) 0.10 Sales Reps 250 1,000
Features P2 Mfg. ($/unit) 0.30 Ad Message 400 1,800
ST Loan Rate (%) 7.0 Demand Estimates 2,000

***REMOVE PERIOD 1 DEMAND FORECAST***

What I recommend is that when you make your "forecasted" decision you leave the loan at "0" until everything else is complete. Then look at your forecasted "cash" flow statement and it will give you an estimate of your cash flow. This cash flow estimate will be either "positive" or "negative". If the cash flow estimate is positive by $500,000 or more, do not request a loan.
If the cash flow statement estimate is negative you need to request a loan equal to the estimate. I recommend you ask for $500,000 more than you need to avoid a