Conrad’s Photographer’s Supplies (pg. 270 in text) Question 1. If the Bingley’s decided to organize a photography store from scratch discuss how this decision would compare to the other two methods of getting into the business on a. risk b. independence c. information requirements. One point (comment) for each – nine marks total. Question 2. In evaluating this business in order to purchase it, discuss concerns you would have about a. the previous owner b. financial information c. assets of the business. (2 comments for each topic – 12 marks total). Question 3. Assuming the information in the financial statements is accurate, is Shelly Conrad’s asking price a reasonable one? Use the book value and capitalization of earnings methods to help you answer this question. Use 8% as the interest rate (rate they will pay on the loan). Six marks total. Question 4. There is at least 1 adjustment to the balance sheet (2 marks) and 2 to the income statement (four marks) that should be made to make these statements more accurate and which will affect the calculation of the price of the business. Make the adjustments and re-evaluate the asking price based on your adjustments. Comment on the asking price, is it fair or not fair (four marks)?

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