BU121 Lecture Notes - Lecture 11: Venture Capital Financing, Cash Flow, Financial Plan
Document Summary
Selling 200 units * contribution = total contribution. -= contribution/unit * 50 units = 2500 total additional contribution. Yes still losing but not as great a loss! You need to do something to cover your fixed costs, or you will be out of business. 60price 10variable = contribution * 200 units = total contribution. 45price 5variable = 40 contribution * 300 units = 12000 total contribution. *always follow the same steps for every question! The role of finance and the financial manager. How organizations use funds: short term expenses. Raising long term financing: long-term debt financing, equity financing. Why it is so difficult to raise money for entrepreneurial ventures: problems - information asymmetry and uncertainty, solutions to venture finance problems* Amounts and sources of capital: estimating financing needs** Startup costs, (pro-forma financials)/forecast of revenues and costs,(cash flow statements)/cash budgets, breakeven: types and sources of capital.
