Homework
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 homework, write a 5 pages, proposal that includes the following parts:
a. Summary of client needs
b. Advantages and disadvantages of debt financing
c. Advantages and disadvantages of equity financing
d. Recommendation for a financing strategy for SmartClean
e. Complete breakeven analysis (based on given price analysis and cost)
Format your homework according to the give formatting requirements:
a. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
b. The response also includes a cover page containing the title of the homework, the course title, the student's name, and the date. The cover page is not included in the required page length.
c. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.