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“Today Shapes Tomorrow

 Published Every Monday    Volume  139 Special Edition August 3, 2009














































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Chapter 13 – A hard fought victory against “Jack & Jill Lemonade” in week-11

Last week we discussed details of the tenth week.  For week-11, you did your homework and decided to do the following – 

YOUR STRATEGIC ANALYSIS –

  • “Jack & Jill Lemonade” closed due to intense competition from you.  You were the only lemonade stand in the neighborhood.  In the spirit of things and the July 4th weekend, you decided to keep the price at $0.50 per cup instead of raising it back to $0.75 or $1.00 per cup.

  • Your sales shot up to 120 cups this week.  To keep up with increased sales and work load you hired a friend for $10 a week to help out.  Your sales did go up but your profits went down due to increased cost of $10.  You now have to decide if you can afford to keep your friend or should you raise the price for week-12?

  • At the end of week-11 you have $351.62 in cash.  Remember your initial investment of $100 came from your personal savings of $40, parents loaned $35, and your friends put-in $25.  Can you just return their initial monies and just keep the rest? Of course not, your parents loaned you $35 at 12% annual interest rate and your friends put up $25 to share a part of the Lemonade business.  How will the math work? We will discuss it in the next chapter.  

SALES – You sold 120 lemonades this week.  As rumored “Jack & Jill Lemonade” did close.  Your  weekly sales and profits for the past 11 weeks look good.

CUSTOMERS – Your customer base increased as “Jack & Jill Lemonade” customers came to your stand for lemonade.

PRODUCT AND SERVICES – You are still keeping the quality of lemonade good.

PRICE – You decided to keep price the same at $0.50 per cup.

COST – Due to more work you had to hire your friend at $10 a week which reduced your profits some.  Now you have to decide whether to live with lower profits, increase the price, or reduce the cost by laying-off your friend?  Tough decisions ahead!

Keep up the good work!  This is how your week-11 numbers look –

 


Learn more about…

What is Credit History?  Why is it important to have a good credit history? Volume 12.    

What is Economy, Business, Workers, Goods,  Services,  Stock, DOW, S&P500, and NASDAQ in Volume 16. 

Does it pay to study hard? Volume 17.    

What is Currency and Foreign Currency Exchange rate? Volume 14What is stronger or weaker currency? Volume 20. What does the dollar slide mean? Volume 32.


How does money grow in a bank? Volume 21. 

What is Fed Funds rate and Discount rate? Volume 22

What does the interest rate cut mean for you? What is APR? Volume 23. 

How to read stock information? Volume 25. 

What is “Black Monday”…Crash of 87”? Volume 31.

Who are CEO, CFO, Shareholders, and the Board of Directors? What is SOX? Volume 33


What does “$4.95 + Tax” means?  Volume 47.


What is a Recession?  What is a Depression? Volume 48.


What is Mergers & Acquisition (M&A)?  What is a Merger?  Volume 49.


What is ADR?  Volume 62.


What does buying back of shares means?  Volume 63.

Why is consumer confidence so important?  Volume 64.


 

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