Accounting Study Guide

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Group 5/10:00-11:30/WF
11U University of the Philippines Diliman
13U Extension Program in Pampanga
2nd Semester 2011-2012

Case 5 Written Report
Financial Forecasting and Corporate Strategy

In partial fulfillments
Of the requirements for
The Subject
Business Management 141
(Managerial Finance)

Submitted by:
Razon, Breth Jay T.
Santos, Karl Lyndon B.
January 03, 2012

Submitted to:
Professor Marcial Bermudo
Table of Contents
I. Dedication………………………………………………………………………3 II. Statement of the Problem………………….……………………………………4 III. Statement of the Objectives…………..………………….……………………..4 IV. Point of View………….………………………………………………………..4 V. Areas of Consideration………………………………………………………….5 VI. Presentation/Analysis……………………………………………………………5 VII. Summary/Conclusion/ Recommendation..……………………………………....9 VIII. Bibliography…………………………………………………………………….10

Dedication
This project is dedicated to our parents who have never failed to give us financial and moral support, for giving all our need during the time we developed our system and for teaching us that even the largest task can be accomplished if it is done one step at a time. This project is also dedicated to our dearest and closest that I've been fortunate enough to have been blessed with who gave us moral support at times that we find things to be hard. We also want to dedicate this project to our professor who taught us to be better in things that we do as well as being a model by being a responsible person. And lastly, we dedicate this project to God who never let us down and guided us towards our life.

I. Statement of the Problem
A. Major Problem
* Should Rapid Fire Batteries, Inc. continue to compete with the national distribution of automobile batteries? B. Minor Problem
1. Allison Miller’s plan of achieving national distribution comes with the challenge of offering a full, unlimited mileage, unlimited life warranty to compete with national brands. 2. The price at which the Supreme battery is offered should be competitive enough compared with others. 3. Allison requires a return of 14% after tax cost of capital with the sales of the Supreme battery and at the same time, having the same profit margin for the Advantage battery.

II. Statement of the Objectives
A. Major Objective
* To know if the company would be better off upon entering national distribution. B. Minor Objectives
1. To know if the company can handle the cost associated with offering an unlimited warranty. 2. To predict if Rapid Fire Batteries, Inc. can set a price lower than its national brand competitors. 3. To know if Allison would be able to successfully attain the 14% after tax cost of capital that she desires.

III. Point of View
Allison’s view primarily considers the introduction of the Supreme battery to the national market as well as maintaining the same profit margin earned from the sales of the Advantage battery. In addition, Allison wants a return of 14 percent for all of the funds that she would be investing in association with the future warranty claims on the product. We would be expressing the point of view of Allison and at the same time, we would be looking at the pros and cons of her decisions.

IV. Areas of Considerations
A. National Competition on the Automobile Battery Industry
This is the main factor why the Supreme battery should be better than any other brands. B. Cost Associated with Unlimited Warranty Batteries
Rapid Fire Batteries, given with its operations in the Advantage battery, should be able to cope up when they decide to start offering an unlimited warranty. C. Price of the Supreme Battery
In association with the national competition, this is a possible edge for a product to be patronized by most customers. D. Inflation Rate
Prices of goods differ from different periods. A good estimation of future price changes can give a good...
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