Chapter 11: Financial Preparation for Entrepreneurial Ventures
1) I would not call it surprising, but the most interesting thing in the reading was about break-even analysis. I was aware that a process like this existed, but I did not know the specifics. The margin approach is very algebraic and quite interesting to read about.
2) One part of the reading that was confusing to me was about pro forma statement. I was confused on how it would account for variable expenses.
3) Why are companies so eager to cut corners such as with the payback method? I ask the author this because I genuinely would like to know his opinion on the matter. With the net present value method, how is inflation accounted for if it is considered? I want to know this because it would be more accurate for this approach.
4) I disagree with the author about utilities cost. I do not believe that they are mixed variables. Just because a price is generally the same each time for certain things, such as water, does not make it a fixed cost. Utilities are completely variable.
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