Jordan-Williams, Incorporated (JWI), is a major publisher of college textbooks f

Question

Jordan-Williams, Incorporated (JWI), is a major publisher of college textbooks focused on business education. At the company's quarterly strategy meeting, senior management decided to expand into business education materials aimed at corporations that require entry-level and midlevel managers to complete training courses to improve their business skills. For such training, content (in the opinion of JWI's senior management) is best delivered via the Internet since it has cost advantages and allows flexibility in scheduling employee training.

Explanation / Answer

Workings

1. Proftability Ted has assumed that the operating expenses are entirely fixed in nature, hence operating expense has been projected accordingly. Though the business modelseems to consist more of fixed expenses , need to do do detaine break up of cost structure to identify the relationship between sales and cost. 2. Cash flow Ted considered that the decrease in cash of 11 Mn would continue, but needs the following adjustment 1. Normalisation for Advertisement 2. Relation ship of cost to revenue as mentioned in the profitability.

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