This case exposes students to multiple managerial accounting concepts within the context of a family-owned and operated business. Students must use cost-volume-profit analysis, forecast net operating income, and determine the net present value (NPV) of cash flows using the time value of money to make a recommendation to sell or continue to operate a family-owned and operated small business. Beyond the financial considerations, students must also consider the stakeholder impact(s) when making their recommendation(s). This case extends existing managerial accounting case literature by integrating multiple managerial and tax accounting concepts, including cost volume profit, margin of safety, degree of operating leverage, time value of money, net present value, capital gains tax, and corporate income tax with nonfinancial considerations into the decision-making process. Instructors interested in other cases addressing some of the topics covered in this case should access the cases provided in Appendix A.
Prior to assigning the case,...
