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HW 1
HW 1
HW 1
The revenues for this firm increased in the first three years, but then stayed consistent from year
three to year 5.
2. What difference do you see between the product and administrative costs?
The product cost was dependent on how many products the company made in that specific year,
while the administrative costs were the same for each year regardless of how many products were made.
3. Will you be willing to invest $5,000 for 25% ownership in this firm?
No, because for only a quarter of ownership, I would be losing money because the net cash flow is
less than the amount of money I am investing in the company.