Mark and Ruth Murphy are preparing a plan to submit to venture capitalists to fund their business, Landscape Masters. The company plans to spend $270,000 on equipment in the first quarter of 20X7. Salaries and other operating expenses (paid as incurred) will be $28,000 per month beginning in January 20X7 and will continue at that level thereafter. The company will receive its first revenues in January 20X8, with cash collections averaging $25,000per month for all of 20X8. In January 20X9,cash collections are expected to increase to $60,000 per month and continue at that level thereafter. Assume that the company needs enough funding to cover all its cash needs until cash receipts start exceeding cash disbursements.

1.

How much venture capital funding should Mark and Ruth seek?

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