I-Expander

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Our consulting project for this semester was on the I-Expander.  The I-Expander is a hard plastic case that contains a SD card slot and an extra battery.  The SD card slot allows the I-Phone to have more memory, and the back-up battery allows the I-Phone to run longer.  Thus, the term I-Expander!

In order to come up with cost of goods sold, we went to a website that sells electronics called digikey.  We got the battery prices and electronic circuitry and battery prices and estimated a sales discount for buying in bulk.  We estimated that this three man team would want about $45,000 a year for their work. We got the estimate for shipping charges by going to a shipping company and seeing how much they wanted for a 5 by 3 pallet from the port to where we are located in the U.S.  We finally got our estimate for shipping the product from China to the port in the U.S. from a different shipping company. We do have an issue in knowing whether or not they would let us ship partial pallets or whether we would need to fill a whole pallet.

We only have a four year forecast because of the nature of the business of electronic accessories.  As we sell our product, there will be less demand as the I-Phone becomes older until they come out with a new model.  As such, we have a going concern past four years. We also did not rebalance our WACC because our internal rate of return was over 200%.  There is no way that we could rebalance our company to reach our WACC of 12.53%, so we did not attempt to do so.

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