Jim Bowden has been operating his business for some time now and thinks it is time to grow and expand. To compute the cost of expanding his existing business, Jim Bowden makes the following estimates:
Adjacent lot $40,000
Metal prefab building 25,000
Hydraulic lifts 15,000
Tools and equipment 9,000
Parts and inventory 5,000
Additional operating expenses 55,000
1. Classify Jim's expansion estimates into the three categories of capital: (a) fixed capital requirements, (b) working capital requirements, and (c) growth capital requirements.
2. Explain to Jim the possible (and realistic) sources of capital for expansion. Where would you recommend that he go for the funds he needs? Why?
Write a 500 word paper responding to the questions above. Be sure to use the information from the text and lesson and any other reference material needed to support your position.