Guillermo Furniture Store Analysis and Recommendation

Taraswa Lance, Swanzetta Maxwell, Kiera Peoples, and Johnnique Harris


May 3, 2010
Dr. Kofi
Guillermo Furniture Store Analysis and Recommendation
      The purpose of this paper is to analyze Guillermo Furniture Store’s alternatives, make a recommendation for their financial decision, and make justifications based on the recommendation. A pro-forma cash flow budget will also be created for Guillermo’s next five years. This in depth analysis will help Guillermo Furniture Store handle the possible challenges of the future.
By hiring a team of financial experts, Guillermo must examine the sound financial analysis presented to him and look to pursue the final recommendation. This presentation will provide analysis of three potential alternatives and make a final recommendation for Guillermo to move his business forward. Included in this presentation will be a listing of the key assumptions for each alternative, in addition to credible, mechanically correct and properly justified NPV calculations for each alternative. A final recommendation based on the analysis is presented, including logical rationale and justification for the final recommendation, a sensitivity analysis of the NPV calculations for the recommended alternative, and a five year pro forma cash flow budget for the recommended alternative. At the conclusion of this presentation, it will be clear the way Guillermo needs to move to keep his business thriving within this competitive market. (This yellow highlighted portion may be reintroduced if extra words are needed, and the red highlighted sections have been reworded.
Key Assumptions
      The three alternatives for Guillermo to consider are to current and continue doing business as normal, to invest in new high-tech equipment, or to become a broker. Each alternative uses certain key assumptions. These assumptions help to provide an estimate, or forecast, of how Guillermo will...