UGBA 10 Lecture Notes - Lecture 2: Pepsis, Angel Investor, Secured Loan

• School: Berkeley
• Department: Business Administration Undergraduate Program
• Course: UGBA 10
• Professor: John Briginshaw

Document Summary

Fixed cost: doesn"t depend on units sold. Variable cost: rises as more units are sold. A unicorn" does not a trade in the stock market but has a value of greater than billion. First rule of viability: get yourself a good business. Profit: sales - costs, where costs = fixed costs + variable costs. Np = number of units times the price. Nv = number of units times the variable cost. Mommy charges pippa for table and glasses. Cost of lemonade and sugar is sh. 40. Every time she sells lemonade, profit of sh. 60, cost of sh. 40, total contribution of sh. 20. Optimal selling of glasses would be 0. Raises finance to pay for assets by issuing common stock. Banks tend to be conservative, don"t like putting money at risk and like to raise equity capital (like to borrow money) Debt is borrowing by the company (low risk)