Week 6 Learning Team: Stable Money Makers

Week 6 Learning Team Reflection:

Stable Money Makers

FIN/571 Foundations of Corporate Finance

March 2016

Summary

Week 6 Learning Team Assignment for University of Phoenix course for Corporate Finance 571 was for Learning Team D members to watch "Corporate Finance Video: Stable Money Makers" video located in the WileyPLUS Assignment Week 5 Videos Activity. Learning team members were asked to individually identify a capital improvement that could help Peggy with her Alpaca business.

Taking on Partners

Peggy Parks saw a profitable business opportunity in the industry of breeding Alpaca’s that are lama look a-likes. Peggy sought a more tangible investment opportunity versus an intangible investment such as stocks. The alpacas are either sold to other owners wishing to have certain breeds of alpacas or the alpaca fleece is sold for its fiber (Brook Farm, 2016). Peggy notice her 401k plummeting nearly fifty percent. Peggy invested $56,000 for seven alpacas while seeing a great return on her investment in a short amount of time. To take advantage of this forward momentum a capital movement Peggy could implement would be to partner with other alpaca breeding farms and focus one or a select group of breeds to raise and market. Each partner would be given percentage shares in the profits based on the agreed upon terms.    

Improving the Breeding Process

One capital improvement plan that Peggy Parks could use that would help her business would be a business plan that consist of equipment purchases, schedules, and options for financing the business to continue to bring in revenue and not feel like her financing was moving in the wrong direction.  She would need to continue to make the Alpaca’s breed every so often and establish sales when the mothers were expecting.  She would need to promote the business and save based off the money received that is not going to expenses or to the payment of the farm.  Regardless of who works with her they would want to get paid, but she as the business owner should stay educated on the nature of breeding to keep the money coming in and how the Alpaca can stay healthy with her and after she sales them.

Breeding Promotion

          Peggy parks chose to invest in breeding Alpaca’s. A capital improvement plan that Peggy should invest in would be to promote the breeding of her Alpaca’s, providing the best environment to ensure this happens as often as possible. She should also turn the birth of the alpacas into a marketing opportunity and encourage visitors to come and witness the birth and first few hours of an Alpaca’s life. This would promote the conversations about her business and assist in advertising to assure sales would increase as the breeding increased.