The company is seeking $2.5 million of financing to fund the acquisition of Mighty Cab Association and its initial operations. This funding will cover the purchase of Mighty Cab, marketing, purchase of extra vehicles, software, and hardware.
The table below shows the key assumptions for City Taxi.
City Taxi's Break-even Analysis indicates that the firm has a strong balance of costs and sales. The company estimates a monthly break-even sales volume of approximately $43,000, which will be reached by Fiscal Year (FY) 2000.
City Taxi is in the early stage of development, thus initial projections have only been made on accounts that are believed to most drive the income statement.
The table below outlines the company's cash flows for FY 1999-2001. The required $2.5 million will be spent to acquire Mighty Cab's operations ($1.25 million), as well as to purchase additional property ($250,000) and equipment ($200,000). An additional $500,000 will be spent on other short-term assets.
The table below provides City Taxi's actual and projected balance sheets for 1999-2001.
The following table contains important business ratios from the taxi cab industry, as determined by the Standard Industry Classification (SIC) Index #4121, Taxi Cabs.
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