Chapter 13

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Chapter 13

  1. 1. CHAPTER 13 DISCUSSION QUESTIONS1) Explain the difference & the advantages/disadvantages ofequity capital & debt capital.2) Discuss the following sources of equity capital:A) AngelsB) Corporate Venture CapitalC) Venture Capital Companies3) Explain the following federal loan programs aimed at smallbusinesses:A) EDAB) HUDC) USDAD) SBIRE) STTR
  2. 2. CAPITAL”ANY FORM OF WEALTH EMPLOYED TO PRODUCE MOREWEALTH”-3 MAIN FORMS1) CASH2) INVENTORY3) EQUIPMENT
  3. 3. ENTREPRENEURS NEED 3 DIFFERENT TYPES OF CAPITAL1) FIXED CAPITAL2) WORKING CAPITAL3) GROWTH CAPITAL
  4. 4. 1) FIXED CAPITAL”CAPITAL NEEDED TO PURCHASE A COMPANY’SPERMANENT OR FIXED ASSETS”-MAIN TYPES OF PERMANENT/FIXED ASSETS:1) LAND2) BUILDINGS3) EQUIPMENT-MONEY INVESTED IN FIXED ASSETS TENDS TO BE FROZENBECAUSE IT CANNOT BE USED FOR ANY OTHER PURPOSE
  5. 5. 2) WORKING CAPITAL”CAPITAL NEEDED TO SUPPORT A COMPANY’S SHORT-TERM OPERATIONS”-CURRENT ASSETS MINUS CURRENT LIABILITIES-WORKING CAPITAL IS NORMALLY USED TO:1) BUY INVENTORY2) PAY BILLS3) FINANCE CREDIT SALES4) PAY WAGES & SALARIES5) TAKE CARE OF UNEXPECTED EMERGENCIES
  6. 6. 3) GROWTH CAPITAL”CAPITAL NEEDED TO FINANCE A COMPANY’S GROWTHOR EXPANSION IN A NEW DIRECTION”-GROWTH CAPITAL FINANCES:1) EXPANSION OR PURCHASING NEW BUILDINGS2) HIRING ADDITIONAL WORK FORCE3) INCREASING INVENTORY
  7. 7. 3) GROWTH CAPITAL”CAPITAL NEEDED TO FINANCE A COMPANY’S GROWTHOR EXPANSION IN A NEW DIRECTION”-GROWTH CAPITAL FINANCES:1) EXPANSION OR PURCHASING NEW BUILDINGS2) HIRING ADDITIONAL WORK FORCE3) INCREASING INVENTORY

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