Analytics Exercise 20-4 (Algo)Big10Sweaters.com is a new company started last year by two recent…

Analytics Exercise 20-4 (Algo)Big10Sweaters.com is a new company started last year by two recent college graduates.
The idea behind the company was simple. It will sell premium logo sweaters for Big Ten colleges with one major, unique feature. This unique feature is a special large monogram that has the customer’s name, major, and year of graduation. The sweater is the perfect gift for graduating students and alumni, particularly avid football fans who want to show support during the football season. The company is off to a great start and had a successful first year while selling to only a few schools. This year it plans to expand to a few more schools and target the entire Big Ten Conference within three years.
You will allocate your aggregate order to the Individual schools based on thelr expected percentage of total demand. You discussedyour analysis with Rhonda and Steve and they are OK with your analysls. They would like to see what the order quantitles would be ifeach school was considered individually.
You are curious as to how much Rhonda and Steve made In their business last year. You do not have all the data, but you know thatmost of thelr expenses relate to buying the sweaters and having them monogrammed. You know they pald themselves $50,000 eachand you know the rent, utilitles, Insurance, and a benefit package for the business was about $17,000.They are paying you $42,000 and you expect your benefit package addition would be about $1,000 per year. Assume that they orderbased on the aggregate forecast.
a. What is the expected pre-tax profit for this year, after deducting salary and overhead? Use average forecast for each school.Assume sales materlalize per the average forecasts and the entire safety stock amount (computed based on aggregate demand)must be sold on eBay.Note: Round your answer to the nearest dollar amount.
b. If they must pay 50% in taxes after deducting thelr venture capital firm payment, how much do you expect thelr business cash toIncrease this year?Note: Round your answer to the nearest dollar amount.