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The purpose of this case is to allow students to confront the issues related to starting a new service business, such as evaluation of the business concept, identification of different customer segments, and assessment of the comprehensive service package necessary for long-term success in a competitive service industry. Students are also asked to record projected transactions, prepare projected financial statements, and perform a break-even analysis. It is intended for use early in a course on financial accounting and reporting. A companion case, "Classic Tours, Inc.: Strategic and Financial Issues in Starting a Business," (UVA-C-2141), was subsequently written for use in such courses as Starting New Ventures or Entrepreneurship, where greater emphasis would be placed on the strategic considerations and somewhat less emphasis would be placed on the financial details.

This case presents a series of financial events for students to record and to use in preparing financial statements.

This technical note discusses the three types of foreign exchange risk: transaction exposure, translation exposure, and economic exposure. It addresses the nature of those risks and presents some methods that companies might use to manage them. Included in this note are discussions of the financial accounting and reporting requirements of FAS No. 52 (Foreign Currency Translation), of foreign exchange markets, of hedging strategies, and of such activities as loan swaps and licensing agreements.