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During the pandemic, Singapore saw a significant jump in pet ownerships, many of whom were first - time pet owners. According to Animal Veterinary Service

During the pandemic, Singapore saw a significant jump in pet ownerships, many of
whom were first-time pet owners. According to Animal Veterinary Services group
director Jessica Kwok, the number of dog licences increased from about 70,000 in 2019
to about 87,000 in 2022.
Based on a Euromonitor International report, the pet dog population in Singapore
(including unlicensed dogs) is around 114,000 in 2023, up by almost 3 per cent from
2019. On the other hand, pet cat population hovers around 94,000 in 2023, a jump of
almost 10 per cent compared with 2019.
According to Mr. Kam Kok Yen, head of animal health at Boehringer Ingelheim, pet
owners are spending more on their beloved furkids, fuelled by the humanisation of
pets. He remarked that more pet owners are looking into the animals health and well
being as they treat the animals more like family rather than just a pet.
Meanwhile, as Singapore and other countries exit from the pandemic phase and
embrace COVID-19 as endemic, countries have opened up their borders and
international travels are on the rise again. Mr. Steven Ler, president of the National
Association of Travel Agents Singapore (NATAS) reckoned that the travel industry is
in the midst of a huge comeback. He further commented, The appetite for overseas
travel is high as many desire to explore the world again and go revenge travelling, in
hopes of making up for lost time.
As pet owners plan for their overseas trips, they are faced with the problem of arranging
for the care of their furkids in their absence.
While this is an issue for pet owners, you see this as an opportunity. You believe there
is an attractive business proposition to start a pet hotel to meet the growing demand for
pet boarding services, particularly in the mid-to-high tier segment as pawrents are
now more willing to splurge on pampering their furkids, ensuring that their pets will
be well-taken care of whilst they are away.
Starting and operating a pet hotel requires significant investment and good planning
before commencing on this venture. You shared this idea at a recent networking event
and an interested potential investor has requested for a preliminary proposal prior to
further discussion. [Sources: Adapted from Lee (2023)]
Question 1: Justify the equity-debt ratio if the pet hotel decides that it requires an investment and loan of $120,000 and $180,000 from the investor respectively

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