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  3. you are required 1 explain the relevance of each of...

Question: you are required 1 explain the relevance of each of...

Question details
You are required:
1. Explain the relevance of each of the items of economic data listed above to NordicPressen!
2. Explain whether NordicPressen should continue with their expansion plans. Clearly justify for arguments for or against expansion. Give at least 3 arguments “for” and 3 arguments “against”!
dow Help 1.Assignment (2019.01.28) NordicPressen NordicPressen operates a chain of newsagents and coffee shops in the south of Northern European country, and are considering the possibility of expanding their business across a wider geographical area. The business was started in 2002 and annual revenue grew to 10 million euro by the end of 2016, Between 2016 and 2009 revenue grew at an average rate of 2% per year. The business still remains under family control (company registered as limited liability company) but the high cost of expansion via the purchase or building of new outlets would mean that the family would need to raise at least 2 million euro in equity or debt finance. One of the possible risks of expansion lies in the fact that both tobacco and newspaper sales are falling. New income is being generated by expanding the product range stocked by the stores, to indude basic foodstuffs such as bread and milk. NordicPressen purchases all of its products from a large wholesale distributor which is convenient, but the wholesale prices leave NordicPressen with a relatively small gross margin. The key to profit growth for NordicPressen lies in the ability to generate sales growth, but the company recognises that it faces stiff competition from large food retailers in respect of the prices that it charges for several of its products. In planning its future, NordicPressen was advised to look carefully at a number of external factors which may affect the business, including government economic policy and, in recent months, the (i) Bank base rate has been reduced from 5% to 4.5%, and the forecast is for a further 0.5% reduction within six months (ii) The annual rate of inflation is now 2.2%, down from 2.3% in the previous quarter, and 2.7% twelve months ago. The rate is now at its lowest for 25 years, and no further falls in the rate are expected over the medium/long term. (iäi) Personal and corporation tax rates are expected to remain unchanged for at least 12 months (iv) Taxes on tobacco have been increased by 10% over the last 12 months, although no further increases are anticipated (v) The government has initiated an investigation into the food retail sector focusing on the problems of excessive profits on certain foodstuffs created by the high prices being charged for these goods by the large retail food stores MacBook Pro
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