Fi512 Entrepreneurial Finance Essay example - 860 Words

Week 1 Assignment Chapter 1: Exercises/Problem #1 pp.33-34 1. [Financing Concepts] The following ventures are at different stages in their life cycles. Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing. A. Phil Young, founder of Pedal Pushers, has an idea for a pedal replacement for children’s bicycles. The Pedal Pusher will replace existing bicycle pedals with an easy-release stirrup to help smaller children hold their feet on the pedals. The Pedal Pusher will also glow in the dark and will provide a musical sound as the bicycle is pedaled. Phil is seeking some financial help in developing working prototypes.†¦show more content†¦Calculate the ROA for each firm. * Venture XX = 10% * Venture YY = 75% * Venture ZZ = 15% * B. Which venture is indicative of a strong entrepreneurial venture opportunity? * I would think that Venture YY is because of its high after tax profit margins and its high asset turnover. * C. Which venture seems to be more of a commodity-type business? * Venture XX because of its low after-tax profit and asset turnover rate. Its ROA appears to be dependent on sales of larger quantities. * E. Use the information in Figure 2.9 relating to pricing/ profitability and â€Å"score† each venture in terms of potential attractiveness. * Venture XX = 1.33 * Venture YY = 2.33 * Venture ZZ = 1.33 Chapter 2: LearnRite.com Mini Case questions p.74 A. Project industry sales for children’s software through 2015 based on the information provided above. $2.85Billion B. Calculate the year-to-year annual sales growth rates for LearnRite. [Optional: Estimate the compound growth rate over the 2011–2015 time period using a financial calculator or computer software program.] Year 1 to 2 = 9.6% Year 2 to 3 = 3.13% Year 3 to 4 = 2.19% Year 4 to 5 = 1.81% C. Estimate LearnRite’s expected market share in each year based on the given data. Year 1 = 0.1% Year 2 = 0.7% Year 3 = 1.8% Year 4 = 3% Year 5 = 4.3%