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Mid Unit Assignment Dragons Den.

The document provides financial details for a banana guard business seeking investment. It outlines costs of $2500 per month for rent and salaries. Products cost $2 to make and sell for $9 each. The maximum revenue is $4537.50 by selling at $8.25 per item. The profit function is $6.25x - 2300, requiring over 368 items sold to turn a profit. The business owner values the company at $100,000 and seeks $30,000 investment for 30% equity to expand production facilities and capacity. Last year's sales were $108,000 with $47,400 in profits.

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Taha Afzal
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256 views16 pages

Mid Unit Assignment Dragons Den.

The document provides financial details for a banana guard business seeking investment. It outlines costs of $2500 per month for rent and salaries. Products cost $2 to make and sell for $9 each. The maximum revenue is $4537.50 by selling at $8.25 per item. The profit function is $6.25x - 2300, requiring over 368 items sold to turn a profit. The business owner values the company at $100,000 and seeks $30,000 investment for 30% equity to expand production facilities and capacity. Last year's sales were $108,000 with $47,400 in profits.

Uploaded by

Taha Afzal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Dragon’s Den Mid-

Unit Assignment
By Michael
Kikiopefoluwa Durowaye
Costs

• Rent is $1200 per month including utilities

• Salaries $1300 per month

• Materials cost $2 per item produced.


Cost function

m = cost of material=$2 per item.

x = number of items produced

b = Overhead costs = 1200+1300=$2500

Function: C(x) = 2x + 2500


Revenue

• Selling price will be $9.


Maximum and Minimum Revenue

By looking at the graph, we can see that R(x)= 0 at x = -60 and 50. Which
correspond to the revenue of $0.

The vertex represents the highest revenue which occurs when x = -5.
Price= 9 + 0.15(-5) = $8.25

• Therefore we can conclude that:


• The Minimum revenue the company can make would be
$0.
• The Maximum revenue the company can make is $4537.5.
• Where the company has to sell the product at $8.25 in
order to accumulate the maximum revenue.
Domain and Range

• The domain is D = {xeR/-60<= x<= 50}

• We restricted the Domain because these are the x values that produce revenue
of 0 and anything beyond those numbers will result in a negative revenue.

• Range R = {yer/0<=y<=4537.5}

• This is due to the fact that the company can only generate a maximum revenue
of $4537.5.

• The 0 indicates that no revenue has been made. (There can not be a negative
value for revenue)
Revenue of the Function with respect to
the sold items and the new selling price

• From the graph we found that the maximum revenue


occurs at x = -5.
• Price= 9 + 0.15(-5) = $8.25

• Therefore, the new revenue function is:

• R(x)= 8.25 x (x)


• Where (x) is the number of items sold.
Profit Function

• Profit= Revenue – Cost

• P(x) = R(x) - C(x)


• P(x) = 8.25(x) – (2x + 2300) {0<=x}
• Where x is the number of items produced
• Assuming that everything that the company produces has
been sold.
Profit Function (Continued)

• P(x) = 8.25x – (2x +


2300) {0<=x}
• P(x) = 6.25x – 2300

• If the company sold 368


items or less then this
would result in no profit
gains towards the
business
The Pitch

Welcome
Dragons
The Banana Safe

• I’m seeking $30,000 in exchange of 30% of my business.

• The reason I started this business:

• Every time I tried to take a banana with me to work, it would


get squashed up.

• There had to be a solution… This resulted to me inventing the


“Banana Guard”

• We have already built a brand that has been well recognized in


retailers.
The Banana Guard
• This product solves a huge issue to banana
consumers with such a simple solution.

• All you do is lift up the cover and fit the banana in.
(covers most banana sizes)

• This product sells for $9. (whole sale)

• I'm specializing in wholesale as it reduces the risk


of stocking up inventory and having to deal with
customers if there are any issues.
The Value of my business

• I Valued this business at a $100,000 was because:

• My current sales were $108,000 for last year.

• This year we are on track to accumulate the same number


of sales.

• The machine I have created costed $25,000 to design and


build.
Value of my business Continued
• This business does not require any workers except for 1 that handles quality control and
packaging.

• My profit I made out of the $108,000 I made last year were $47,400 (which was at its
maximum efficiency of this business)

• Already have a customer who purchases 1000 units which is my maximum capacity.

• This business does not require any workers except for 1 that handles quality control and
packaging.

• My profit I made out of the $108,000 I made last year were $47,400 (which was at my
maximum efficiency of this business.)

• Already have a customer who purchases 1000 units which is my maximum capacity.
The reason of my pitch

• The reason I’m asking for your investment is:

• I’d like to expand my business and purchase my own


facility rather than renting.

• I’d also like to get a second machine to expand by mass


production which will also create more profits per unit.

• I would love your business expertise and connections to


help accelerate the expansion process for this company.
Reflection
• My product seemed to be a great investment with minimal risk as there was only one
employee working and the rest is done by the machine.

• The profits seemed reasonable for a business owner to live off as it is only about $3000 less
than the annual national Canadian GDP which is $50168.5. (according to http://data.un.org)

• This seemed like a realistic report and is considered to be investible which help me learn
how to project sales and determine whether a business could be profitable in the long run.

• Another key fact is that there is no limit to how long inventory can be kept in shelves as this
is a plastic product and not a food. ( no best before or expire dates)

• As the business continues to expand so will its cost which will decrease per unit and
increase sales.
• The easiest part of this assignment was finding the cost of goods sold and the toughest part
was picking the product from dragon’s den.

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