Frank Smith Plumbing Case Solution

May 23rd, 2016
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ASA Institute of Business and Computer Technology
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Analyze the case study, "Frank Smith Plumbing." Analyze the "Frank Smith Plumbing's Financial Statement" spreadsheet. Compare the cost of the truck to the cash flow records Compile your calculations in a Microsoft® Excel® document Develop a 1,050-word analysis and include the following: Explain why limited leverage is good for business.Show the profitability of the project so that Stephanie can convince her father to purchase the truck by borrowing money. Explain how Stephanie should convince her mother that it is inappropriate to call the bank manager and his wife for assistance in getting the loan approval? Analyze whether the investment in the truck is profitable. Explain whether it is more beneficial for Frank to close his business. Explain what you would do in this same situation.

Word Count: 1466
Showing Page: 1/6
Running Head: ANALYSIS OF THE FRANK SMITH PLUMBING CASEAnalysis of the Frank Smith Plumbing CaseStudent Name:Course/Number:Due Date:Faculty Name:1ANALYSIS OF THE FRANK SMITH PLUMBING CASE2Why Limited Leverage Is Good For BusinessLeverage is using financial instruments and borrowing capital from either individuals orinstitutions to increase the potential of returns of an enterprise. It can also be defined as theamount of debt used to finance the assets of a business (Pate, 2004). Companies raiseleverage capital by using two main methods. One of the methods is by issuing fixed-incomesecurities like bonds, notes, bills and corporate papers. The other method is by taking a loanfrom a bank or a lending institution to meet their day-to-day activities. Fixed-Incomesecurities allow a company to borrow for a longer period as compared to loans. By using adebt to finance business operations, a company can invest in business operations withoutincreasing the equity and increases the value of the shareholders.A loan is the ideal method of raising the capital to fund a business by an individual. A loan isthe act of giving out money or property to another party in anticipation of a future repaymentof the principal and some interest. The terms are specified and formally presented to eachparty before the property changes hands and any collateral demanded by the lender specified.They also come with the amount of time required before repayment is required.However, l

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