💼AP Business with Personal Finance
4. Use the following fictional scenario to answer all parts.
Nia is starting a reusable lunch-bag business. She has experience sewing and values reducing material waste. Interviews with local families indicate interest in durable bags. She has USD 900 available to launch the business and wants to test demand before committing to long-term production.
Local Proposal: sew a small batch using recovered fabric and sell directly at a weekend market. Setup costs are USD 600. For the first month, projected sales revenue is USD 1,200 and total ongoing costs are USD 500, leaving USD 700 before deducting the one-time setup cost. Nia can change designs after speaking with customers. Production depends on her limited sewing time.
Supplier Proposal: order a standard design made with newly manufactured fabric and sell online. Setup costs are USD 850. First-month projected sales revenue is USD 1,700 and total ongoing costs are USD 900, leaving USD 800 before deducting the one-time setup cost. The supplier can make more bags, but Nia must commit to the standard design before seeing customer responses. All projections are uncertain, and both options fit within her available setup funds.
Describe an internal, market or external factor affecting Nia.
Explain how that factor creates an opportunity or problem.
Using projected first-month revenue as a financial criterion, describe a difference or similarity between the proposals, using evidence for both.
Using one other financial criterion, describe a difference or similarity between the proposals, using evidence for both.
Using one nonfinancial criterion, describe a difference or similarity between the proposals, using evidence for both.
Recommend one proposal for Nia. Explain why, using any three distinct financial and/or nonfinancial criteria and scenario evidence for each.
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