submit a practice business plan based on all that you have learned this term related to the various elements of developing, organizing and running a business. The assignment will be to create a potential business plan that could be used for a new start-up business that could be used in securing financial assistance from external sources. Requirements for the Business Plan Assignment 1. Cover Page Include the company name, name of owner, city, state, zip code, and the company logo. 2. Executive Summary An executive summary is an introduction to your business. This section should be clear, concise and to the point. We recommend that you revisit this section to review your work after completing the other sections of the business plan to assure consistency and maintain accuracy. The key elements of an executive summary include descriptions of: Your companyProducts or services you sellYour audience and ideal customerFuture of your business and your industry 3. Company Description Provide a high-level review of your business that will help readers and potential investors understand your business model. Elements include: Key employees of your business, such as the CEO, President and Vice PresidentMission statementDetails about the products or services your business will provideQualities that will make your business a success 4. Market Research Provide detailed information to show that you have a solid understanding of the industry within which your business will operate. If you have any further questions, it may be useful talking to a mentor who could offer you specific guidance. We recommend including a description of the target customer for your business, a competitive analysis, and any legal requirements impacting your company and industry. 5. Product/Service Line Describe in detail what your product or service is and how it will meet the needs of your customers. Explain the benefits of your product or service, the advantages it has over the competition, and its current development stage (e.g., idea, prototype). These are the 5 elements I want to see you write up. There may be other elements related to marketing and financing but for this assignment I would like to see you focus on the organization and the products when it comes to the business plan. You can probably do this in 2-5 pages. Be creative but make sure you are realistic and grounded in the information we covered this term. Have fun with it but demonstrate you are thinking about the issues we considered this term.

Question 1(60 marks)Ryan, the president of the Open Corporation, is considering leasing or purchasing equipment.Microtech Corporation has offered to sell the Open Corporation the equipment at a price of$6010,000. Following its usual practice, the equipment is depreciated over fouryears, at the ratesof 40% for the firstyear, and 20%for each of the remaining three years. The salvagevalue of thisequipment is expected to be 0.Alternatively, the OpenCorporation can lease theequipment from ScottCorporation. Four annuallease payments of $1.9 millionare settled at the beginning of each year. Open Corporation canraise capital by issuing bonds with a yield of 12 percent, and the tax rate for OpenCorporation isset to be 30 percent.After comparing the above two options, the Chief Financial Officer of Open Corporation,commented, “Scott’s offer is financially unreasonable due to a negativeNAL (i.e. net advantageto leasing) to our company. Therefore, the annual leasepayments should be curtailed. Meanwhile,1we can pay a security depositto Scott as an incentive. This deposit wouldbe returned on theexpiration date of the leasecontract.” In response to CFO’s comments, Ryan added,“If the leasingterm is acceptable to us, this will suggestthat a negativeNAL should be brought to Scott. As faras I know, leasingis a zero-sum game between the lessee and lessor. I believe Scottreject ourcounter offer.” After several roundsof discussion, Ryaneventually determines to propose acounter offer to Scott, witha reduced leasepayment of $1.8million on annualbasis and a securitydeposit of $1,000,000.Required:(a) In light of the NAL calculation, commenton the following remarks “Scott’soffer is financially unreasonable due to a negative NAL (i.e.net advantage toleasing) to our company.”(12 marks)(b) According to the counteroffer by the Open Corporation, evaluate the NALto Scott. What is the reaction of Scott to this counter offer?The tax rate forScott is presumed to be 40%.(14 marks)(12 marks)(12 marks)(10 marks)(c) Critically discuss Ryan’s remark “leasing is a zero sum gamebetween thelessee and lessor”.(d) Explain the rationale for lesseesto accept a lease offereven if NALs arenegative.(e) If the purchase of equipment is funded by bond issuance instead of owncapital, do you consider this factor in NAL analysis? Explain.2undefinedQuestion 2 (40 Marks)Great Car Company Limited, throughits subsidiaries, manufactures and sells pick-up trucksinAsia market underbranded names. The Companyalso researches, develops, and manufacturesprincipal automotive components for use in the assembly of pick-up trucks.The company is considering a new investment project which has the same riskas existingbusinesses. The initialoutlay for the project is $55 million. The company expectsthat the projectwill generate additional earnings of $10 millionper year. The company currently has no debt.Thecurrent annual earnings available to common stockholders are $80 million.The company currently has 6 million sharesoutstanding. Currently, the required rate of return onequity is 12%. Traditionally, the company has paidout all earnings to the stockholders as dividendsand financed capitalexpenditures with new issuesof common stock.All earning streams areassumed to be perpetuities. There are no taxes and no bankruptcy costs.Required:(a) Analyze the valueof the firm if common stockis issued to finance the project. (6 marks)(b) One of the bankssuggests that thecompany can issue $55 million, 9%perpetual bonds to finance the project. Advisethe value of the company andthe rate of return required by stockholders.(10 marks)(c) TSL, another competitor firm, has a 8% couponrate convertible bond due 20years from now.The convertible bond has a parvalue of $1,000and is sellingat $970. The conversion price of thebond is $50 per share. A non-convertiblecoupon bond of similar qualityis currently yielding10%. The commonstockof TSL is selling at $40 pershare. Assume thatbond interest payments aremade annually.i Determine the conversion ratio of the convertible bond.3(4 marks)undefinedii Calculate the conversion premium of the convertible bond.iii Access the minimum price at which the convertible bond should sell.iv Explain why a convertible bond sells at a premium above its value as abond or common stock.(4 marks)(10 marks)(6 marks)4Requirements: 1200 words

The following transactions were completed during July, the second month of the business's operations:July 1. Peyton Smith made an additional investment in PS Music by depositing $5,000 in PS Music's checking account.1. Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, $1,750.1. Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period.2. Received $1,000 cash from customers on account.3. On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600. Any additional hours beyond 80 will be billed to KXMD at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment for the first two months.3. Paid $250 to creditors on account.4. Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.)5. Purchased office equipment on account from Office Mart, $7,500.8. Paid for a newspaper advertisement, $200.11. Received $1,000 for serving as a disc jockey for a party.13. Paid $700 to a local audio electronics store for rental of digital recording equipment.14. Paid wages of $1,200 to receptionist and part-time assistant.Enter the following transactions on Page 2 of the two-column journal:16. Received $2,000 for serving as a disc jockey for a wedding reception.18. Purchased supplies on account, $850.July 21. Paid $620 to Upload Music for use of its current music demos in making various music sets.22. Paid $800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July.23. Served as disc jockey for a party for $2,500. Received $750, with the remainder due August 4, 2019.27. Paid electric bill, $915.28. Paid wages of $1,200 to receptionist and part-time assistant.29. Paid miscellaneous expenses, $540.30. Served as a disc jockey for a charity ball for $1,500. Received $500, with the remainder due on August 9, 2019.31. Received $3,000 for serving as a disc jockey for a party.31. Paid $1,400 royalties (music expense) to National Music Clearing for use of various artists' music during July.31. Withdrew $1,250 cash from PS Music for personal use.PS Music's chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows:InstructionsEnter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark (✓) in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.)Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations.Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting.Prepare an unadjusted trial balance as of July 31, 2019.