It is likely that operating expenses will nearly double with the acquirement of a new facility. This new facility will also be a significant expense. Since A-1’s net income ($123,858) is a great deal smaller than its total overhead expenses ($569,512), it will need a loan in order to make this business investment possible. If the future goes as projected with success and the sales from the two facilities nearly double that of A-1’s previous year, repayments on the loan will be possible without too much of a financial burden. Throughout the years, as the loan is paid off, A-1 will see significant increases in its net income. Although there are several growth strategies that A-1 can take, the one discussed above is the most beneficial to the company in the long-term. It poses risks and expenses for the current and near periods, but as the business grows, it will offer greater benefits and profits. A-1 is likely to experience a great deal of success with this
It is likely that operating expenses will nearly double with the acquirement of a new facility. This new facility will also be a significant expense. Since A-1’s net income ($123,858) is a great deal smaller than its total overhead expenses ($569,512), it will need a loan in order to make this business investment possible. If the future goes as projected with success and the sales from the two facilities nearly double that of A-1’s previous year, repayments on the loan will be possible without too much of a financial burden. Throughout the years, as the loan is paid off, A-1 will see significant increases in its net income. Although there are several growth strategies that A-1 can take, the one discussed above is the most beneficial to the company in the long-term. It poses risks and expenses for the current and near periods, but as the business grows, it will offer greater benefits and profits. A-1 is likely to experience a great deal of success with this