Reference no: EM131887920

Question: OBJECTIVE: You need to demonstrate your ability to identify how firms raise funds through the use of debt, equity, and retained earnings.

BACKGROUND: 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:

1) Expand the SmartClean business into three new territories,

2) Needs an infusion of capital, and

3) 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.

ASSIGNMENT: Write a 5-page, APA formatted PROPOSAL that includes the following parts:

1) Summary of client needs

2) Advantages and disadvantages of debt financing

3) Advantages and disadvantages of equity financing

4) Recommendation for a financing strategy for SmartClean

5) Complete breakeven analysis (based on given price analysis and cost)