Prepare a financial plan for Apple inc. Describe the organization, including the type of business. Create the business case. Determine why funding is needed for the company. Determine the sources of...

Apple Inc.
Introduction
Apple Inc. is an American multinational company dealing in personal computers, tablets, smart phones and computer software. It is headquartered in Cupertino, California. It was founded by three liked minded people Steve Jobs, Steve Wozniak and Ronald Wayne in the year 1976. As of 2021 it has 511 retail stores globally where the consumers can purchase various types of electronic and computer equipments. The present revenue of Apple as of 2020 is $274.515 billion and the number of employees in the company is 147000. Presently it is managed by Tim Cook who is the CEO of Apple (Steven Levy, 2021).
Funding needs
The funding will be done to expand the business and has plans to build an “Apple Car” by 2023. This will help to revolutionize the automotive sector in the similar manner in which the mobile industry was transformed with the iPhone. For this it will be augmented reality (AR) which will be used for making the redefining car and will help Apple to establish them and launch a product with unique selling proposition (Marko Vidrih, 2018).
Source of funding and Risks associated with each
The sources of funding will be mostly in the form of debt from financial institutions and banks in United States. This debt will be to the amount of $94791 million to be segregated over three years of timeline. Thus it will be mostly borrowing in the form of loan term loans or long term debts. This will definitely increase the interest servicing amount for Apple but on the other hand it will lower the burden of ownership going out of hands if it goes for equity financing. Thus, equity financing may not be a prudent option as the shareholders of Apple may deter to finance for cars which are of high price and low demand.
Going for venture capital is also not a prudent option as it’s generally meant for smaller or start-up companies. It is provided although by investment banks or financial institutions but carries interests at higher rates or may be in the form of delivery of technical expertise (Adam Hayes, 2021).
Finally, it can be self funding by Apple itself to initiate the AR Apple car innovation and manufacturing process. This will definitely put some constraints on the finance of Apple but will help them to be free from payment of interests if they borrow loans or paying dividends if they finances through equity.
Best source of funding
The best source of funding that fits the requirements of Apple Inc. for the innovation and manufacturing of the Apple Car will be partially through self financing and partly through debt borrowing. This is because it will be just $94791 million which is required to start this innovation process. It can self finance to 70% of the total fund which will amount to $66354 million and the rest 30% will be through $28437 million will be through debt financing from various banks and financial institutions in United States. If Apple is unable to go for self financing it can fully go with debt financing at the rate of 3.25% as of March 2020 in United States (Historical Prime Rate, 2021). There will be some additional charged to it @ 0.27% which will make the cost of capital 3.52%.
    Calculation of Cost of Capital
    Beta Value of Apple
    1.22
    
    Risk Free Rate
    1.63%
    
    Equity Risk Premium
    5.50%
    
    Cost of Equity
    8.34%
    
     
    
    
    Tax Rate
    14%
    
    Interest Expenses
    2,873
    
    Cost of Debt
    2458
    
    Rate of Interest
    2.68%
    
    Cost of Debt (%)
    2.30%
    
     
    
    
    Total Debt
    258549
    80%
    Total Equity
    65339
    20%
    Total Value of...