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REQUIRED QUESTIONS 1. Describe the industry and the competitors in which DLI is entering. Discuss DLIs strategy to compete in this market. 2. In what specific ways financially would the grant funding help DLI? How would this be expressed quantitatively? What further questions might you want to ask of this venture (and is there any other types of data that you think would be useful?) 3. Classify the costs by behavior using number of transactions (customer orders) as the activity. Be sure to provide both quantitative and qualitative support when applicable. Does there seem to be an opportunity to substitute fixed for variable costs (or vice versa)? 4. Prepare a contribution margin income statement by month with and without the funding. Comment on DLIs cost structure. 5. Calculate DLIs breakeven point. How does breakeven with and without the grant financing compare? Show your calculations in detail and provide any assumptions and/or approaches that you took to frame an answer to this potential question posed by the Board. Assume grant funding for these questions 6. Which forecasts will the Board be most concerned about accuracy and/or not meeting the projections? Why? How should DLI respond to alleviate some of the Boards concerns? 7. Prepare a sensitivity analysis (+/- 10%) around the average transactions per customer for the Q1 forecasts (present as a contribution margin income statement). What can you conclude from the sensitivity analysis

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