Start work in the coffee industry

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Reference no: EM133613198

Question

Diya wants to start work in the coffee industry in Kerala. She plans eventually to grow coffee plants on that land and make coffee with them. Diya knows that this is a big undertaking and that it will require more capital than she has at the present. Therefore, Diya is planning to start small. This is necessitated by both her lack of capital and her inexperience in coffee making on a large scale. To begin, Diya is going to use $15,000 in savings to finance the initial purchase of coffee beans from which she will make her first batch of coffee.She is also thinking about going to the State Bank of India and asking for a loan.She has decided to make the preliminary planning horizon two years and would like to estimate the profit over that period. Her most immediate task is to decide how much of the $15,000 should be allocated to purchasing coffeebeans for the first year and how much to purchasing coffeebeans for the second year. In addition, each year she must decide how much she should allocate to purchasing coffeebeans to make her favorite Arabica Coffee and how much to purchasing coffeebeans to make the more popular.

Reference no: EM133613198

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