manage the business and will take a small salary until the business is profitable when she would plan to increase her salary.

Ray and Sabrina are considering going into business together. They wish to operate a student shuttle Show more Ray and Sabrina are considering going into business together. They wish to operate a student shuttle that will ferry SJU students to various locations between SJU and their hometowns in New Jersey Pennsylvania New York and Delaware. The service Student Express will require an investment of approximately $200000.00 to purchase vans pay for drivers and for marketing an advertising expenses. Ray and Sabrina expect that Student Express will initially operate at a loss but would expect a positive cash flow by the end of the second year of operation. Ray plans to invest $75000 and Sabrina will invest $25000. They plain to borrow the remaining $100000. Ray has another job and will not be involved in the day to day operations of the venture. Sabrina will manage the business and will take a small salary until the business is profitable when she would plan to increase her salary. a. What form of business do you think would best meet Sabrinas needs? Explain your reasoning. b. Even great relationships come to an end. What mechanisms should Sabrina put into place if she wishes to ease Ray out of the business? Be specific. c. What terms and conditions might Ray and Sabrina expect when they attempt to borrow the $100000 from a commercial lender? What other options might be available to Ray and Sabrina if they are turned down by a bank for the loan? Explain your answers. Show less


 

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