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Question Value: $5
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Question: "Tom, as handsome and nice as he is, is not brightest bulb that
burns, and he needs your help. Quite unexpectedly Tom finds himself in a
position to purchase a well-established funeral home owned by his Aunt
Jerrie. It would be a perfect op****tunity for Tom, and Aunt Jerrie would
love to see him get it. Upon close research, Tom calculates that funeral
home demonstrated a profit, three years ago, $80,000.00. Aunt Jerrie will
gladly sell him the funeral home for $750,000.00. A) Calculated the
businesses R.O.I. Show your work and explain the formula? B) Is this
demonstrated R.O.I. good? Explain why, or why not? C) What are the
implication if Tom's expectation were to purchase a business demonstrating
a
12% R.O.I., 15% R.O.I., 9% R.O.I.? D) Tom researched, and calculated that
this funeral home's assets anf real estate are appraised to be worth
$375,000.00. If Tom has reasonably good credit and &80,000.00 of his own
funds, might he be entitled to financing on the assets? If so, there still
remains the question of the remaining $375,000.00 of the purchase price.
Discuss the several financing options that may be available to Tom? E) Tom
is a bit concerned regarding the financials he was offered from his Aunt.
After re-reading the facts, is there anything that particularly concerns
you? Would it help any more if I told you they were certified? Please
advise
Tom fully. "
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