Short-Term Funding.ppt

The investors plan to expand the company globally in

This preview shows page 8 - 10 out of 10 pages.

The investors plan to expand the company globally in its third year of operation. Some of the countries they can expand to first include Canada and Mexico. This is because, the two countries are closer to the United States and their markets might have similar dynamics to US markets. Secondly, these markets have a high demand and affordable labor because of their high populations and fast growing middle class consumers.
Image of page 8

Subscribe to view the full document.

The tax rates for Canada and Mexico are 38% and 30% respectively . This would not change the decision to expand to these markets since the returns are also significantly high. In the event of the start-up receiving the first 300k at the beginning and the second 200k after three years, I would use the first 300k to fund the internal operations of the business and the second 200k would be used to expand the business.
Image of page 9
Break-even analysis The company is expected to breakeven in its third year of operation. The company would require capital of about 800K US dollars in the first three years. The first 500K would be provided by through venture capital by investors and the remaining would be borrowed. By the end of the third, the restaurant’s free cash flows would be $1000. The company would have reached its break- even point.
Image of page 10

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern