EMMA's Home Care is preparing a Cash Budget to take to the bank for help Financing the start up.
They project their wages will run $50,000 per month and benefits will be 20% of that amount. Wages & benefits
will be payable in the month incurred. Supplies are estimated to be $5,000 a month and payable the month
following the month of purchase. Home office Rent is $7,000 paid each month and depreciation expense on the equipment
bought with their personal savings is $3,000 a month. All other expenses are projected to be $4,000 a month
and paid in the month incurred. Income taxes are not paid until end of year 1.
Patient Revenue in month 1 is estimated to be $70,000. It will grow to $80,000 in month 2 and $90,000 per
month there after. They project no collections in the month the service is rendered (month 1), with 50% collected in the
following month (Month 2) and 50% collected in the month after that (month 3).

Revenue			$240,000
Labor			$150,000
Benefits			$30,000
Supplies			$15,000
Rent			$21,000
Depreciation			$9,000
All Other			$12,000
Total Expenses			$237,000
Earnings Before Taxes			$3,000

a)	Use this information to calculate the minimum total Working Capital needed in the first quarter of operations.
			<== Answer
b)	Which of the following types of debt is best suited to address the working capital needs identified above?
		Taxable Bond Issue
		Lease
		Term loan with equipment collateral
		Line of credit