This topic contains a solution. Click here to go to the answer

Author Question: Explain the difference between financing investment with a business loan versus with venture ... (Read 64 times)

Cooldude101

  • Hero Member
  • *****
  • Posts: 557
Explain the difference between financing investment with a business loan versus with venture capital. What are the pros and cons of each?
 
  What will be an ideal response?

Question 2

The table above represents five points on the production possibility frontier for the small country of Baca, which produces only rugs (measured in thousands) and wheat (measured in thousands of bushels): Does the production possibility frontier
 
  demonstrate the law of increasing opportunity cost? How can you tell?



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

fdliggud

  • Sr. Member
  • ****
  • Posts: 366
Answer to Question 1

Financing with a loan involves accepting an obligation to repay a debt. Financing with venture capital involves accepting funds in exchange for a portion of ownership of the company. With a loan a business owner retains control of her company but must generate enough profit to cover operating costs and loan payments. This may not be possible for a new company. With venture capital there is no obligation to repay the funds. However, a business owner must forfeit some profits and control of her company to the venture capitalist.

Answer to Question 2

Yes. The opportunity cost of increasing the production of wheat rises as more wheat is produced. The opportunity cost of the first 10,000 bushels of wheat is only 5,000 rugs, but the opportunity cost of the fourth 10,000 bushels of wheat is 20,000 rugs.




Cooldude101

  • Member
  • Posts: 557
Reply 2 on: Jun 29, 2018
Gracias!


at

  • Member
  • Posts: 359
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

Did you know?

The first successful kidney transplant was performed in 1954 and occurred in Boston. A kidney from an identical twin was transplanted into his dying brother's body and was not rejected because it did not appear foreign to his body.

Did you know?

When intravenous medications are involved in adverse drug events, their harmful effects may occur more rapidly, and be more severe than errors with oral medications. This is due to the direct administration into the bloodstream.

Did you know?

The word drug comes from the Dutch word droog (meaning "dry"). For centuries, most drugs came from dried plants, hence the name.

Did you know?

The longest a person has survived after a heart transplant is 24 years.

Did you know?

Since 1988, the CDC has reported a 99% reduction in bacterial meningitis caused by Haemophilus influenzae, due to the introduction of the vaccine against it.

For a complete list of videos, visit our video library