ONLY NEED CASH BUGET & BUDGETED INCOME STATEMENT.PROJECT CHOOSE: TARGET MARKETING STRATEGIE

SET
                                                                                SETTINGS
                                                                                Service Revenue    $ 75.00        Number of Optometrists            2        Ending Inventory Requirement    0.3
                                                                                            Wage Rate per Month            $ 6,500
                                                                                Selling Price - Sunglasses    $ 200.00                            Group ID    0        212578796
                                                                                Cost Price - Sunglasses    $ 60.00        Number of Sales Staff:            2        Rand Seed    6072        214961555
                                                                                            Wage Rate per Month            $ 4,000        Year End Cash Balance    432268        220551733
                                                                                Selling Price - Prescription glasses    $ 150.00                            Chosen Project    3
                                                                                Cost Price - Prescription glasses    $ 80.00        Number of Office Staff:            1
                                                                                            Wage Rate per Month            $ 4,500
                                                                                    Jan-2019    Feb-2019    Mar-2019    Apr-2019    May-2019    Jun-2019    Jul-2019    Aug-2019    Sep-2019    Oct-2019    Nov-2019    Dec-2019            year to forecast    2021
                                                                                Sales Volume - Sunglassses    175    184    159    164    154    205    197    174    130    160    175    188            last year    2019
                                                                                Sales Volume - Prescription glasses    116    121    127    120    131    206    199    160    144    139    191    198
                                                                                Service Volume - No. of Clients    105    110    115    109    119    187    181    145    131    126    174    180
                                                                                Other fixed costs                                                randomised value    benchmark value
                                                                                Marketing expense of $900 per annum is paid evenly across 12 months.                                                $ 900    $ 900
                                                                                $3000 of general business insurance is paid in July every year. This insurance covers the period 1st Jan to 31st Dec every year. (100% office)                                                $ 3,000    $ 3,000
                                                                                Bank fees works out to be $48 per month and are paid at the start of each quarter.                                                $ 48    $ 60
                                                                                On average, the office supplies are purchased, paid and expensed every month to the amount of $90.                                                $ 90    $ 100
                                                                                General council rates are $792 per year and are usually paid in December every year. The rates cover the period 1st Jan to 31st Dec every year. (50% store; 50% office)                                                $ 792    $ 600
                                                                                Rent is paid at the start of each quarter and works out to be $6400 per month. (80% store; 20% office)                                                $ 6,400    $ 6,400
                                                                                Water, gas and electricity are combined under utility expense which adds up to $510 per quarter and is usually paid at the end of each quarter. (75% store; 25% office)                                                $ 510    $ 500
                                                                                Note: Quarter 1 runs from 1 Jan- 31 Mar; Quarter 2 runs from 1 Apr - 30 Jun; Quarter 3 runs from 1 Jul - 30 Sep; Quarter 4 runs from 1 Oct - 31 Dec.
                                                                                                                                        With the additional floor space, the owners anticipate that the sales volume of sunglasses and the sales volume of prescription glasses will increase by 20% and 25%, respectively, for each month in 2021 based on the corresponding month in 2019 (e.g. Jan 2021's growth is based on Jan 2019, Feb 2021's growth is based on Feb 2019 etc). Given there is a larger store front, there will be an increase in the number of eye-tests performed by 10% for each month in 2021 based on the corresponding month in 2019.
This project will involve an initial setup costs (i.e. cost of project) which needs to be paid as a lump sum by 10th January 2021. To finance the project, a bank loan will be acquired which will cover 80% of the initial cost. The loan is with a local bank and it will start from 1st January 2021. The funds from this loan will be deposited into the business bank account on 1st January 2021. The loan is on an interest only arrangement with an interest rate of 6% per annum payable monthly.
As part of getting the loan, the business will need to pay an annual 'wealth package' bank fee of $395 on top of all other bank fees. This fee is payable at the start of the loan. All other bank fees will otherwise remain the same as 2019 rates.
On top of the initial setup costs, the business will need to hire 3 additional sale assistants, 1 additional optometrists, and 1 additional office staff at the start of 2021. All new employees are expected to be paid the same rate as current existing staff.
The initial cost of the shop fittings and specialized optometry equipment will need to increase by 100% in order to meet increased demand. The new shop fittings and specialized optometry equipment will need to be purchased at the start of February 2021, with payments for these to be made in April 2021. All other non-current assets will remain the same as 2019 amounts.
All other fixed costs are assumed to increase by 50% based on 2019 amounts.
After the 1st year of the new project, in 2022, both the service volume and sales volume are expected to increase by 15% for each month in 2022 compared to the corresponding month in 2021.    Expansion Project    $ 473,616
                                                                                                                                        By switching suppliers, the unit cost to purchase sunglasses will drop by 30% while the unit cost of prescription glasses will remain the same. James would like to keep the selling price of sunglasses the same. Due to the slightly less well known branding of the glasses, James believes that sales volume for the sunglasses will fall by 20% for each month in 2021 compared to the corresponding month in 2019. (e.g. Jan 2021's growth/decline is based on Jan 2019, Feb 2021's growth/decline is based on Feb 2019 etc).
James believes that the prescription glasses don't make enough margin and so he would like to increase the selling price on prescription glasses by 10%. James believes that due to the increase in selling price, prescription glasses sale volume will decrease by 10% for each month in 2021 compared to the corresponding month in 2019.
As a result of the decrease in prescription glasses demand, James estimates the eye-test service volume will also decrease by 20% for each month in 2021 compared to the corresponding month in 2019. The selling price of eye-tests will remain the same.
The catch with the new supplier is that there will be a more stringent credit term in purchases of inventory. All purchases with the new supplier are still on a credit basis, however, 90% of the amount needs to be settled in the same month of purchase with the remaining 10% settled one month later. For credit term in sales of glasses, the business plans to continue its instore credit policy for their customers.
To further reduce costs, James would like to reduce the salary of some staff. Specifically, he would like to reduce the office staff's and sale assistants' salary by 10%. The business will also be implementing 'green' measures to reduce the utilities consumption of water, gas and electricity by 20%. James also believes the business insurance has been a waste of money as they have never needed to make a claim. He plans to change the insurance policy to reduce the annual premium by 50%. All these increases/decreases are relative to 2019 amounts.
All other fixed costs will decrease by 10% based on 2019 amounts.
After the 1st year of the new project, in 2022, both the service volume and sales volume are expcted to increase by 5% for each month in 2022 compared to the corresponding month in 2021.    Cost Management Strategy    $ - 0
                                                                                                                                        The marketing agency has quoted i-Optometry a monthly cost amount (see cost of project) that will need to be paid at the end of every month. In addition to this monthly cost, the marketing agency also requires a commission equal to 2% of every month's total sales revenue. This commission will also be paid at the end of every month. Note that these amounts this marketing agency will charge are in addition to any existing marketing expenses i-Optometry had to pay in 2019.
Based on the estimates provided by the marketing agency, Olivia believes more customers will come to the store. Olivia estimates that the increased traffic will increase the sales volume of sunglasses by 10%, and with more people turning up, there will be an increase in the number of eye-tests performed by 30%. Given that most customers who get eye-tests will also buy prescription glasses, the sales volume of prescription glasses are expected to increase by 20%. These increases for each month in 2021 are based on the corresponding month in 2019. (e.g. Jan 2021's growth is based on Jan 2019, Feb 2021's growth is based on Feb 2019 etc). Olivia would like to keep all the selling prices the same as 2019 levels.
Given the increase in demand for eye-tests, the business will need to increase the initial cost of the specialized optometry equipment by 50%. The new specialized optometry equipment will be purchased at the start of April 2021 and will be paid over 12-equal monthly instalments starting from June 2021. All other non-current assets will remain the same as 2019 amounts.
To finance the purchase of equipment, the business will take out a loan to cover 50% of the cost of acquiring the equipment. The loan is with a local bank and it will start from 1st May 2021. The funds from this loan will be deposited into the business bank account on 1st May 2021. The loan is on an interest only arrangement with an interest rate of 12% per annum payable at the end of every January, April,...