As noted in the syllabus, the Spring 2007 semester project focuses on the Protect-A-Plate Venture case. This is takes the place of a final exam. In addition to the information given in the case, please incorporate the assumptions in the table below. Use of these assumptions will ensure consistency in your results. Failure to adopt these assumptions will have a significant negative impact on your grade.
| Topic | Relevant assumptions |
| Inventories | Assume a one-month lead time for raw material purchases. For example, what is bought in January is used in February. Inventory is paid for in the month following purchase. |
| Production | Assume that quarterly production in units is as follows (as a percentage of total annual output): Q1: 24%; Q2: 21%; Q3: 15%; Q4: 40%. Monthly production within a given quarter is uniformly 1/3rd of total quarterly production. |
| Expenses | Expenses are paid as incurred |
| Receivables | All sales are on account, with receipts for any given month as follows: 50% in the month of sale, 30% in the next month, and 15% in the second following month. Bad debts are 5% of total sales. |
| Interest on the line of credit | 15% annually; interest is accrued monthly and paid quarterly on the first day of the next quarter. |
| Start up date | Assume the start-up date for the business is January 1. |
Requirements:
The minimum requirements for this assignment are as follows (this cannot get you an A on the project; if you do all of these, and do them extremely well, you would probably get a B.)
- an executive summary supporting your application for the credit line (do NOT include basic facts except as necessary to explain your analysis)
- a product cost summary
- a complete and accurate cost-volume-profit analysis, with appropriate graphs and data tables
- an accurate balance sheet as of the start of business
- a full, accurate master budget, including quarterly income statements and quarterly cash budgets; balance sheet as of 12/31
- a summary of anticipated performance for the year
Remember that quantitative and graphical exhibits do not stand for themselves. They require interpretation and understanding. You cannot assume that bankers will see what you want them to see.
Additional credit will be awarded for things like the items below, based on thoroughness, creativity, and quantitative accuracy. Bear in mind that all analyses must be reasonable; for example, it would be highly unrealistic to assume that the market could be double the amount given in the case, or that machine operator costs could be half the amount given.
 | sensitivity analysis (what happens if...?) |
| best case, worst case, and most likely case analyses |
| the case indicates that Ken gets a salary. What about Richard? Should he get one? Why or why not? If so, how much? |
| consideration of markets, competition, productivity...other issues, beyond those outlined in the case. |
Discussion of such issues must be supported by appropriate quantitative analysis.
Professional presentation is expected. Poorly written, badly organized, sloppy work will receive no credit.
The final is a team or group project. Groups will consist of 2 or 3 [NOT 4] people. Each group will be constituted immediately after spring break. You are free to make up your own groups. I will not serve as a matchmaker. Each group will meet to agree upon their own "rules of engagement," which are to be submitted to me in writing no later than April 17th. Each member of the group must sign the group policies document, which I will retain in the event of a group "blow-up." Your "rules" should address such things as [but are not restricted to] sharing of effort, attendance at meetings and procedures for arranging meetings.
In the event of a blow-up, the entire team is to meet with me. At this meeting, I will present you with the document that you all signed and try to get to the root of whatever problems may be occurring. If the problems cannot be resolved, the team has the right to fire a member who is uncooperative, although that action should be a last resort. If your team is experiencing problems, PLEASE report the situation to me BEFORE you get to the "breaking point." I cannot force you to cooperate if you don't want to, but I do insist that major problems be reported to me immediately simply to ensure that I know what is going on. In the event of a "firing," the "firee" will complete the entire project alone. Yes, that means starting over again, even if the "divorce decree" is filed the day before the final is due. Consequently, there are significant incentives for cooperation and learning to work together. [Welcome to the real world. We seldom get to choose our professional colleagues, and we may well wind up working with folks who are irritating or downright nasty.]