Demonstrate your ability to identify how firms raise funds through the use of debt, equity, and retained earnings
Demonstrate your ability to identify how firms raise funds through the use of debt, equity, and retained earnings
For this part of the course project, you will demonstrate your ability to identify how firms raise funds through the use of debt, equity, and retained earnings.
Your client, SmartClean, Inc., is a cleaning service for office and industrial locations. SmartClean has been in business for 5 years and has shown steady revenue growth each year. The owner originally started the business using a business loan. The owner has $10,000 remaining on the loan after steadily making payments and has an excellent personal and business credit history.
The owner wishes to expand the SmartClean business into three new territories, needs an infusion of capital, and is looking for $50,000 in order to make the expansion.
The expected fixed costs for the current business and expansion is $75,000. SmartClean’s average charge per job is $250.00. The variable costs per job is $35.00.
To complete this assignment, write a 5-page, APA formatted proposal that includes the following parts:
Summary of client needs
Advantages and disadvantages of debt financing
Advantages and disadvantages of equity financing
Recommendation for a financing strategy for SmartClean
Complete breakeven analysis (based on given price analysis and cost)
You must proofread your paper. But do not strictly rely on your computer’s spell-checker and grammar-checker; failure to do so indicates a lack of effort on your part and you can expect your grade to suffer accordingly. Papers with numerous misspelled words and grammatical mistakes will be penalized. Read over your paper – in silence and then aloud – before handing it in and make corrections as necessary. Often it is advantageous to have a friend proofread your paper for obvious errors. Handwritten corrections are preferable to uncorrected mistakes.
Use a standard 10 to 12 point (10 to 12 characters per inch) typeface. Smaller or compressed type and papers with small margins or single-spacing are hard to read. It is better to let your essay run over the recommended number of pages than to try to compress it into fewer pages.
Likewise, large type, large margins, large indentations, triple-spacing, increased leading (space between lines), increased kerning (space between letters), and any other such attempts at “padding” to increase the length of a paper are unacceptable, wasteful of trees, and will not fool your professor.
The paper must be neatly formatted, double-spaced with a one-inch margin on the top, bottom, and sides of each page. When submitting hard copy, be sure to use white paper and print out using dark ink. If it is hard to read your essay, it will also be hard to follow your argument.