Allocate Resources

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“How should management use this information in informing financing and resource allocation decisions?” West Bay Restaurant Supply's potential financial avenues would benefit the business and its shareholders in the long run. West Bay Restaurant Supply has two primary strategies in mind for future expansion. However, each circumstance has to be evaluated to determine the best course of action. Only with this data can West Bay Restaurant Supply's accurate profit margins and cash flow be calculated. Put your money into an intelligent energy management system as a last option. Because of its investments, West Bay Restaurant Supply will save money on its variable energy expenses in the long run (Fernando, 2021). The objective is to create conditions where the organization may save money on its energy bills and expand its operations. The new strategy saves around $10,000 annually in energy bills. However, West Bay Restaurant Supply will incur expenses for launching and maintaining the program. The first $50,000 investment will pay for organizational setup and initial training. Investments in training to learn how to use the new procedures effectively are necessary. However, implementing this plan might alter how things are done now. However, the prototype is crucial to the growth of West Bay Restaurant Supply. However, the plan is not free of drawbacks. The budgeting process, resource flow, influence on cash flow, and cost of capital are all crucial factors to consider. Consequently, expanding West Bay Restaurant Supply's sales team via recruitment, training, and process improvements is a top priority. Finding, hiring, and training fifty salespeople is necessary to do the job. The sales force of West Bay Restaurant Supply now numbers one hundred people. Customer demand and the company's bottom line will grow in the coming years (Kenton, 2020).

Having a dedicated sales team built up will be costly. Each worker will get $12 per hour in basic salary plus a $30 commission. If this strategy is implemented, West Bay Restaurant Supply stands to gain in worth and revenue. If the proposal does not come to fruition, West Bay Restaurant Supply will lose money and see the value of its investment decline. The data shown above should be used to guide expansion decisions. Profit maximization and minimizing expenses are the administration's key priorities. It can save money on sales and manufacturing by reducing fixed expenses like workforce and operational expenditures (Fabozzi & Drake, 2013). Financing options like loans and stock might help West Bay Restaurant Supply manage and maximize company resources. “Explain cash inflows and outflows as they relate to operating budgets” Money coming in is an inflow, while money going out is an outflow. The total income and cost of operating the firm have been recorded. The operational budget breaks out the annual revenues and costs that the business must cover. “Briefly explain how a capital budget is related to an operating budget” Businesses use capital budgeting to assess the viability of spending much on new construction or machinery. One technique to ascertain if a project will provide a satisfactory return on investment is to analyze its cash inflows and outflows (Kenton, 2020). Financial projections for a specific accounting period, usually a calendar or fiscal year, are the backbone of every company's operating budget. Investments and their associated ongoing expenses may be mapped out in a budget (Kenton, 2020). An operational budget is a financial plan that projects income and expenditures. At the beginning of each fiscal year, management creates a financial forecast called the "operational budget." Operational budgets tend to need to be corrected over more extended periods. A

company may utilize a capital budgeting method when selecting whether or not to invest in a piece of fixed equipment. This procedure produces a quantifiable image of the fixed asset, giving the company additional information to make conclusions. Investment decisions must be made with the capital budget in mind when a fixed asset's upfront and ongoing costs are high, as is often the case (Fernando, 2021). “Discuss the company’s financial status in terms of its ability to meet short- and long-term obligations” Top management, aided by finance, is primarily accountable for the company's financial health via careful analysis of the timing of key operations. Priorities are established, and initiatives that provide the fastest return on investment are investigated. Determines whether or not present resources may be used to future debts. Keeping tabs on the company's cash flow requires a well-thought-out project management strategy. It will also determine who gets promoted for the sake of society's survival. If you put in the time and effort to prepare ahead, you will succeed. “Recommend appropriate investment decisions based on discounted cash flow calculations” The company's capacity to satisfy current and future commitments could improve its financial health. Based on the current fiscal year's income statement, I am concerned that we will not generate enough revenue to cover our running expenditures. West Bay Restaurant Supply caters to all 500 small companies in the United States. As it expands, the firm must make investment decisions that benefit the company, its employees, and the community it serves. My employer has requested that I choose the best investment plan from two possibilities and justify my choice. There are two potential investments: 150 salespeople will be available when an

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additional 50 are recruited and educated. We needed more people to help with the workload, so we hired more. Typically, a salesperson will earn $12 per hour plus commission, for $18 per hour. If the expected demand comes to pass, the company's bottom line will improve. The corporation might lose money if demand from customers is lower than expected. Salaries and employee development will cost $1.5 million during the 2019 fiscal year. In 2020, the funding for learning and growth increased by $ 125,000. We anticipate spending money on something other than staff training or workforce expansion during the next four years. It is estimated that hiring more people would cost an extra $2.5 million in the 2020 fiscal year. As of FY 2021, it will be $7.5 million. The corporation might lose $3,750,000 in the first year alone if sales are just half as high as projected. A new energy management system is being considered for acquisition by West Bay Restaurant Supply as part of the company's CSR initiatives. If this technique were widely implemented, users might save about $10,000 annually on energy costs. The preliminary investment in training and setup would be about $50,000. “How does ROI inform strategies related to resource allocation?” Return on Investment (ROI) is a metric often used to assess the success of an investment and to compare the relative merits of other investments (Fernando, 2021).

References Kenton, W. (2020). Capital Budgeting. Retrieved fromhttps://www.investopedia.com/terms/c/capitalbudgeting.asp Wave Accounting. (2021). Net Cash Flow Formula. Retrieved from https://www.waveapps.com/accounting/education-center/net-cash-flow-formula

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