Name______Date DUE______

BUSINESS FINANCE: FINAL PROJECT

This final project will be counted twice, as the assessment for both quarter 2 and your final exam

Understanding how money flows within our economic system, you have just graduated from college and decide you do not want a boss and want to open your own business. You are interested in starting a business that provides a product or service, based on something you know quite a bit about. Knowing this, complete the following sections typing a paper using a times new roman, 12 point font. The paper should be double-spaced and each paragraph tabbed to start. If you need to write any part, please staple it and include it with your final project.

SECTION A: Business Type

  1. Every type of business a person opens requires some thought. In this section, answer the following:
  1. What type of business do you want to open and what reasons will you use to choose the business you are opening (Type means restaurant, retail operation, etc..)
  2. What opportunity cost(s) do you have by making the decision you made?
  3. When you open this business, will you open it as a sole proprietorship, partnership, corporation or an LLC? Please give at least 4 reasons why you choose the category of business you did.
  4. Tell me how you will get initial funding for your business and what steps you will take to get the funding you need.
  1. Use of Financial Markets

-As a business owner, you will need to understand where to invest your profits. Assume you have $500,000 to invest and need to determine what to do with it. Your options are as follows:

  1. Invest into Capital Improvements
  2. Invest into new staff
  3. Invest into some form of money market account
  4. Invest into Capital Markets

** You may choose to break up your investment into different parts of all the choices above as well

-Please break down what you plan to invest, how much money you expect to make and explain why

SECTION B: Business Expenses

  1. All business have both current expenses and capital expenses. Please describe for me the following:

-What current expenses do you expect your business to have each month

-What capital expenses could you have

-What capital expenses should you plan to have in the future

-What things can a business owner do to keep your expenses under control (Or lower them)

SECTION C: Financial Choices and the Future

4. Saving / Investing: You need to make a saving and investment plan. Research what experts say you should do. First, determine how much money you will set aside for emergency savings. Then, determine how much you will set aside in an IRA (or other retirement plan). Based upon your savings and average gains, complete an analysis of how much you should have at retirement because of compound interest.

• Expert research – what should you do?

• Emergency savings – why and how much

• Discussion of how to save for retirement

• Compound interest analysis – how much will you have at retirement?

5. Choose a banking institution: Compare at least three banks, using at least four different criteria. Introduce the section with a summary of your decision. These financial institutions should be located in the area you have chosen to live in Section C.

6. The Financial Planning process has 5 steps (See your notes). Please make a financial plan to make a major purchase in your life (Buying a home, financing a vacation, buying a car, etc). To do this, determine that your expected monthly money left over after all your expenses is $400. In order to complete this, you need to research what the expected down payment must be, how much you will need to save and how long it will take you to reach your goal.

SUMMARY

7. Write a one single page summary describing the 5 rights every person has in the US free Enterprise system (See your notes) and explain to me how supply and demand effects these rights.