Description
For this part of the course project, you will demonstrate yourability 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 andindustrial locations. SmartClean has been in business for 5 years andhas shown steady revenue growth each year. The owner originally startedthe business using a business loan. The owner has $10,000 remaining onthe loan after steadily making payments and has an excellent personaland business credit history.
The owner wishes to expand the SmartClean business into three newterritories, needs an infusion of capital, and is looking for $50,000 inorder 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 variablecosts 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)
