100% Original, Plagiarism Free, Tailored to your instructions

Order Now!

Entrepreneurial Finance
Week 2: Hand-in Assignment

Present your answer in the form of a Business Report for Arlene Lo and submit it to the Turnitin Link below. The expected length of your HIA response is around 750 – 1,000 words for the main body of your Report, which is due by end Day 7.

The Alpha One Software Corporation was organised to develop software products that would provide Internet-based firms with information about their customers.  As a result of initial success, the venture’s premier product allows firms with subscriber bases to predict customer profiles, retention, and satisfaction.
Arlene Lo received an undergraduate degree in computer sciences and information systems from a major university four years ago.  The Omega Subscriber Software Product was developed, plus test marketed with the help of two of her classmates; Alpha One Software Corporation was then up and running within one year.  Venture capital was obtained for start up operations; a second round of venture financing helped Alpha One to move through its survival stage.  Product success in the marketplace has allowed the venture to achieve such rapid sales growth that it is now able to get bank loans and issue long-term debt.  The tax deductible interest rate on the bank loans is 10 percent.  An effective cost for the long-term debt now needs to be determined; the cost of common equity was estimated using a risk-free rate of 7 percent and a risk premium of 13 percent.
Arlene Lo has now reached the point of being able to consider whether Alpha One is adding economic value in terms of its net operating profit after taxes (NOPAT) and its weighted average cost of capital (WACC).  Based on the most recent years’ financial statements (below), Arlene is interested in answering the following:

What is Alpha One’s NOPAT?  Why does NOPAT differ from the earnings after taxes?


Estimate the effective before-tax cost of the long-term debt.


Estimate the effective after-tax cost of the bank loan and the long-term debt.


Estimate the cost of common equity capital.


Determine the financial structure weights for the two interest-bearing debt components and the common equity.
What is Alpha One’s WACC?
Also using the ratios discussed in the textbook, assess the health of the firm based upon 2-3 key ratios and your findings from the above questions.
Briefly explain what factors are likely to have a particular impact upon the WACC estimates for entrepreneurial firms that have not yet reached the maturity stage of their venture life cycle

Present your answer in the form of a Business Report for Arlene Lo.
Alpha One Software Corporation
Income Statement                                  Year to 30 June2011

Net Sales


Cost of Goods Sold


Gross Profit


General & Administrative Expenses






Earnings Before Interest and Taxes




Earnings Before Taxes


Income Taxes (@ 40% rate)


Earnings After Taxes




Retained Earnings for the year


Alpha One Software Corporation
Statement of Financial Position       30 June 2011
(Balance Sheet)



Accounts Receivable




Total Current Assets

Non-current Assets, Net Book Value


Total Assets


Accounts Payable


Accrued Liabilities


Notes Payable (bank loan repayable)


Total Current Liabilities

Long-Term Debt


Common Stock (20,000 shares)


Retained Earnings


Total Liabilities & Equity

Assume that 100% capital allowances (deductible tax depreciation) are available with respect to the acquisition of $30,000 of non-current assets in the year to 30 June 2011. All interest charges and other expenses were tax deductible for that same year. The corporation is subject to a 40% tax rate on its taxable income.
Please submit your response to the Hand-in Assignment to the Weekly Assignments Turnitin link.


Our Service Charter

  1. Excellent Quality / 100% Plagiarism-Free

    We employ a number of measures to ensure top quality essays. The papers go through a system of quality control prior to delivery. We run plagiarism checks on each paper to ensure that they will be 100% plagiarism-free. So, only clean copies hit customers’ emails. We also never resell the papers completed by our writers. So, once it is checked using a plagiarism checker, the paper will be unique. Speaking of the academic writing standards, we will stick to the assignment brief given by the customer and assign the perfect writer. By saying “the perfect writer” we mean the one having an academic degree in the customer’s study field and positive feedback from other customers.
  2. Free Revisions

    We keep the quality bar of all papers high. But in case you need some extra brilliance to the paper, here’s what to do. First of all, you can choose a top writer. It means that we will assign an expert with a degree in your subject. And secondly, you can rely on our editing services. Our editors will revise your papers, checking whether or not they comply with high standards of academic writing. In addition, editing entails adjusting content if it’s off the topic, adding more sources, refining the language style, and making sure the referencing style is followed.
  3. Confidentiality / 100% No Disclosure

    We make sure that clients’ personal data remains confidential and is not exploited for any purposes beyond those related to our services. We only ask you to provide us with the information that is required to produce the paper according to your writing needs. Please note that the payment info is protected as well. Feel free to refer to the support team for more information about our payment methods. The fact that you used our service is kept secret due to the advanced security standards. So, you can be sure that no one will find out that you got a paper from our writing service.
  4. Money Back Guarantee

    If the writer doesn’t address all the questions on your assignment brief or the delivered paper appears to be off the topic, you can ask for a refund. Or, if it is applicable, you can opt in for free revision within 14-30 days, depending on your paper’s length. The revision or refund request should be sent within 14 days after delivery. The customer gets 100% money-back in case they haven't downloaded the paper. All approved refunds will be returned to the customer’s credit card or Bonus Balance in a form of store credit. Take a note that we will send an extra compensation if the customers goes with a store credit.
  5. 24/7 Customer Support

    We have a support team working 24/7 ready to give your issue concerning the order their immediate attention. If you have any questions about the ordering process, communication with the writer, payment options, feel free to join live chat. Be sure to get a fast response. They can also give you the exact price quote, taking into account the timing, desired academic level of the paper, and the number of pages.

Excellent Quality
Zero Plagiarism
Expert Writers

Instant Quote

Single spaced
approx 275 words per page
Urgency (Less urgent, less costly):
Total Cost: NaN

Get 10% Off on your 1st order!