Flexible Budget

Flexible Budget

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Although this product is being targeted at the home consumer, the sales department thinks there is great potential in the commercial market, and it should be pursued. You brought this issue to the project sponsor who, in turn, brought it to executive management. Management decided that this opportunity should be investigated as part of your project. It would like to see an opportunity assessment completed that defines the new markets, potential revenues, high-level sales and marketing strategy, and a 5-year financial business case with initial expenses clearly defined. They have agreed to provide additional resources (people, funding, and time) to create this new deliverable. You need to tell them how many people you will need to complete this deliverable within the next 6 weeks. You can assume that the people will be allocated to work on this deliverable a maximum of 20 hours per week.

Create a schedule focused on the creation of this new scope item. The schedule should include the following:
?A list of tasks that will need to be completed
?Dependencies between tasks
?Total estimated effort to complete each task
?Resource assignments
?Start and end dates

The schedule should contain between 25 and 60 tasks/subtasks. Use Microsoft Project, Excel, Word, or any other appropriate tool to document your schedule. You will also need to define the team members you will need. For each team member you will need, create a bulleted list of skills/expertise he or she must have to complete his or her assigned tasks.

Budget is a financial tool that assists in planning of the firm’s activities. This paper shall use Google Company’s financial performance of the fiscal years 2010, 2011 and 2012 to prepare a flexible budget forecast for the year 2014. Google is one of the major provider of internet related services and products. Internet service and product industry is one of the fastest growing industries in the world economy due to a rapid increase and development in internet related infrastructure and the emergence of many business that use internet as their business plat form. The main players of this industry are Amazon, Yahoo, Google, eBay and Liberty interactive.

The companies’ revenue growth for the year 2011 compared to the year 2010 is as indicated by the table 1.1 below

Table 1.1 internet service providers’ revenue performance in the years 2010 and 2011 (million $)

Company name Revenue (2010) Revenue 2011 Percentage increase
Google 2931554.5 37905.0 29.3
liberty interactive 1098676.7 11624.0 5.8
eBay 915294.6 11651.7 27.3
Amazon 3419416.8 48077.0 40.6
Yahoo 632512.7 4984.2 -21.2

The table indicates that all the firms (used in this analysis) have been recording an increase in their revenue except Yahoo Company that recorded a decline in its revenue in the year 2011. On average, all the companies recorded a revenue increase of 16.36 % in the fiscal year 2011. The average net income of the companies grew by a slight lower margin than revenue.

Google Company is doing relatively well compared to most of its competitors in the industry. Like Many American companies, Google have been formulating intelligent ways of avoiding tax payment. Thus, Google has an advantage over other technological companies whose origin is non-American. In the years 2010, 2011 and 2012 the Company remitted a total tax return of $ 52, $54 and $68 million respectively. The tax remission for the technological industry as it is to other industries differs from one jurisdiction to another. The interest rates have been very volatile over the years due to their dependence on the financial market which is very dynamic. For example, Google Company earned a net income from interest sources of $415, $ 584 and $626 in the years 2010, 2011 and 2012 respectively.

The table 1.2 shows Google Company’s financial performance for the year 2010, 2011 and 2012 (in million dollars).

  2010 2011 2012 Average Growth (%)
Total Revenue 29321.0 37905.0 50,175 30.8
total cost and expenses 18940.0 26163.0 37,415 40.6
net income 8505.0 9737.0 10,737 12.4

The internet service market has been growing at a rate of 25% per annum. (Laudon & Traver, 2007) The Google Company recorded ……………

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