Explore how entrepreneurs make financing decisions when they are faced with timing issues and low bargaining power versus VCs. Mindersoft Stephen R. Chapin Jr., the CEO of a new startup, Mindersoft, Inc., must evaluate an offer from a venture capital firm in March 1997. The firm, Novak Biddle Venture Partners, offers to invest $2.0 million for 40 percent of the company resulting in a $5 million post-money valuation for the firm. He is concerned that the valuation offered by the venture capitalist is too low. He believes that the premoney valuation of the company should be at least $10 million based on the potential profitability of the company and the successful efforts to date in lining up several key sponsorships with national retailers.
Standard costing also helps managers set target level performance and standards as well as sales prices of products. 2. Based on the purchase of 220,000 square yards of material and a difference of 25 cents from the actual price of $8.25 and standard price $8 leads to an unfavorable price variance of $55,000. As for the difference between the actual 110,000 material used and the 120,000 budgeted, once the budgeted $8 price is factored in we find a favorable quantity variance of $80,000.Finally the difference between an unfavorable $55,000 and favorable $80,000 we have a $25,000 favorable flexible budget variance. 3.
They both plan to retire 45 years from today. Because their budget seems tight right now, they had been thinking that they would wait at least 10 years and then start investing $2400 per year to prepare for retirement. Tricia just told Tom, though, that she had heard that they would actually have more money the day they retire if they put $2400 per year away for the next 10 years – and then simply let that money sit for the next 35 years without any additional payments – than they would have if they waited 10 years to start investing for retirement and then made yearly payments for 35 years (as they originally planned to do). Please help Tom and Tricia make an informed decision: Assume that all payments are made at the end of a year, and that the rate of return on all yearly investments will be 8% annually. 1.
In 2011 the current ratio was 1.86. By 2012, it decreased to 1.77 rating in the lower second quartile group in the industry. That said, Company G’s ability to repay its debt is consistent with showing a weakness from year to year based on the industry’s quartiles of 3.1 with a strong ability to cover liabilities 2.1 at the median to 1.4 stating a weakness. As such, this is an area of concern. 2.
The Lemma Company manufactures and sells 10 products. Ways have been found to cut both the setup and inventory holding costs in half. What effect will this have on the economic order quantities of the 10 products?. b. They will not change.
However, if the demand is inelastic (not likely to be true), then Apple should preserve its profit margins. Answer 2: P= 4,500-.15Q Total Revenue = PxQ = 4,500Q - 0.15Q^2 Marginal Revenue = 4,500 - 0.30Q For Profit Maximization MC = MR Thus 1500 = 4,500 - 0.30Q => Q = (4,500 - 1,500)/0.30 => Q = 3,000/0.30 => Q = 10,000 Put Q = 10,000 in the demand function to ge the price: P = 4,500 - 0.15x10,000 = 3,000 Thus Apple should price its product at 3,000 and sell 10,000 units. Answer 3: Power Mac's user value had fallen by 600. This means that the demand curve has further shifted to the left by $600. Thus the new demand curve will be P = 4500 - 600 - 0.15Q => P = 3900 - 0.15Q If Apples stays at the $3000 price mark then quantity will be: 3,000 = 3,900 - 0.15Q => 900 = 0.15 Q => Q = 6000 Thus sales will fall from 10,000 units to 6,000 units if Apple held its price of $3000 P= 3,900-.15Q Total Revenue = PxQ = 3,900Q - 0.15Q^2 Marginal Revenue = 3,900 - 0.30Q For Profit Maximization MC = MR Thus 1350 = 3,900 - 0.30Q => Q = (3,900 - 1,350)/0.30 => Q = 2,550/0.30 => Q = 8,500 Putting Q = 8,500 in the price function we get P = 3,900 - 0.15x8500 => P = 2,625 Thus according to the new policy Apple should see 8,500 units at $2,625 per
Problem #6, p. 221 in text. (You do not need to “derive” the Cournot equilibrium. Just solve for the values using the appropriate formulas.) Market demand: P = 400 – 2Q Unit cost production = 40 a. Firm’s quantity in equilibrium is : q1 = (a-c)/3b = (400-40)/(3*2)= 60 unit = q2 Firm’s revenue: P= 400 – 2 * (2*60) = $160 Firm’s profit = (60*160) – (60*40) = $7200 b. Monopoly output: MR=400-4q MC=40 MR=MC 400 – 4q = 40 then q=90 unit The reason that producing on half the monopoly output (90*1.5 = 135) a Nash equilibrium outcome is that it will exceed the market demand of Nash equilibrium ($160).
Through a thorough cost analysis and weightage of pros and cons of three alternatives, the team recommends to use an NVOCC (Non-Vessel operating common carrier) for small shipments which will lead to a lot lesser lead times and will help reduce costs as well. Along with this, the recommendation is also to increase packing efficiency for company’s already in use 20/40-feet containers. Currently the packing efficiency is 85%, and just by making it 95% the cost saving is $ 253,863.89 annually which will increase as total shipments are forecasted to grow by 15% for the next 5 years. Issues: The major issue identified in the case is to reduce the expenses on consolidated shipments from china overall increasing the supply chain efficiency. This issue is in fact more of an opportunity and the opportunity is to reduce the variable cost associated with the consolidated shipments as the estimated growth in shipments from China and Taiwan is 15% per year.
for example - if you pick 50 apples per hour you will receive your pay, if not you will no longer have employment within our company. Transactional leadership denotes that employees work better when the chain of command is distinct and the employees are monitored carefully to ensure that all objectives are met. The members of staff are not encouraged to think outside the box, they are to follow the rules and procedures installed by the manager. This form of leadership maybe deemed to be an inadequate form of leadership however if the outcome needed to be achieved is clear and simply using this style could attain the best results. I will be comparing the aforementioned leadership style with James McGregor Burns (1978) transformational leadership, he suggests leaders that possess the skills that can inspire positive changes in their team through their strength of their vision and personality, they are able to change the ways the team thinks to enable them all to work towards their goal.
What makes people happy is an incentive; people only act when they receive benefits. Optimal decision is made at margin: when producing one more additional unit of goods economists use the word marginal. Economists mean that the optimal decision is to continue any activity to where the margin benefit equals the marginal cost. Provide an example of a decision in which you compared the marginal benefits and the marginal costs associated with that decision. For example, in examining the marginal cost of producing one bushel of apples.