Tutor profile: Danielle W.
You are the manager of a monopoly that sells products to two groups in different parts of the country. Group 1's price elasticity of demand is -4, while group 2's price elasticity of demand is -5. The marginal cost of producing the product is $60. What is the markup and price for group 1 and 2?
Markup - Group 1 1.33 Price - Group 1 $80.00 Markup - Group 2 1.25 Price - Group 2 $75.00
How do you determine post-money valuation in a venture capital round?
Post-money valuation is Pre-money valuation + capital invested. The ownership is determined by the amount invested divided by the post-money valuation.
Subject: Corporate Finance
How do the financial statements link together?
The P&L or income statement is the flow of operating revenue and expenses in and out of the business but is represented in GAAP. In order to reconcile GAAP accounting to cash which is on the balance sheet, you must adjust non-cash items in the cash flow statement. The balance sheet is the "stock" or point in time that shows all of the assets and liabilities of the business. Change in working capital is the sum of the current assets less current liabilities and net income on the P&L is what adjusts shareholders' equity.
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