Question

1. If Apple Computer Inc. is used as the model, then new firms should expect to raise capital in which one of these orders? Start with the first money raised.

1. owners, venture capitalists, suppliers, public investors
2. venture capitalists, owners, public investors, suppliers
3. owners, suppliers, venture capitalists, public investors
4. owners, public investors, venture capitalists, suppliers

2. Revenue increases by $200 and the cost of goods sold is 78%. What dollar amount of extra taxes will be owed if the marginal tax rate is 35%?

1. $15.40
2. $70.00
3. $54.60
4. $44.00

Answer 1

Answer for 1st question is

c. Owners,suppliers,venture capitalists, public investors

Owner's capital will be interest free. So better to raise fund from own money.

Suppliers may give trade credit for particular month without any interest or with some nominal interest.

In venture capitalist and public investors ,there may be dilution of control and ownership so this option to raise fund will be preferred after Owner's capital and suppliers credit.

Answer for 2nd question is a. $15.40

Particulars Amt ($)

Revenue 200

Less Cost of goods sold (200*78%) 156

Profit 44

Extra taxes will be = 44*35% = $ 15.40