Funding Options and Production Decisions
Part 1 Title: Funding Options and Production Decisions: Implications for Startups and Existing Companies As an aspiring entrepreneur with a pioneering startup idea, you have two options: look for money from early-stage investors (inland investors or venture capital firms) or use your personal savings to start the venture. Given the funding options available, discuss the aspects listed below for your decision. 1. Discuss the advantages and disadvantages of seeking cash capital from early-stage investors compared to using your own savings. Consider factors such as the degree to which decisionmaking control is maintained within the company, the repayment obligations associated with each financing option, and the relative amount of money that can be obtained from each option. 2. Choose the most appropriate source of funding for the company and how this choice can be affected by the dynamic market environment and its impact on asset price movements and investments. Justify your answer by providing clear reasons and examples. 3. Given the same capital market environment, how would your approach to financing and investment strategies change if you were the CEO of an established firm with fixed profits? 4. Discuss the different production decisions you might make as an established company compared to a startup. Your discussion should be at least 500 words long and not more than 750 words. Please include the word count. Following the APA standard, use textbook references and citations and any other sources. Part 2 Mission Title: Cost and Production Analysis: A Case Study of Green Farfest Farms Introduction: Green Harvest Farms is a leading agricultural company specializing in the production of organic fruits and vegetables. Here is the short-term cost structure of the company: Quantity Produced (Q) Price (P) Total Cost (TC) Total Revenue (TR) 100 tons $200 $30,000 $20,000 200 tons $180 $55,000 $36,000 300 tons $160 $80,000 $48,000 400 tons $140 $110,000 $56,000 500 tons $120 $140,000 $60,000 Market demand for organic fruits and vegetables is expected to rise to 1,000 tonnes next year. The company plans to expand its production capacity to meet the growing demand for organic products. Based on the summary of the case study, write a detailed report on Green Farm Farms covering the following sections. 1. Define the concepts of production, cost, revenue and productivity in the context of Green Harvest farms’ operations. Explain how each of these factors contributes to the overall performance and profitability of the company. 2. Examine the short-term data of the company and calculate the variables listed below. Next, conduct an analysis of these calculated metrics, to discuss their effects on Green Harvest Farms’ overall profitability and short-term production decision. Average cost (AC) per production level (Q). Marginal cost (MC) per production level (Q). Average revenue (AR) per production level (Q). Marginal revenue (MR) for each production level (Q). Profit or loss at each level of production (Q). 3. Based on the data, are Green Harvest Farms experiencing economies or reflections of scale? Explain your answer using the values of average cost (AC) and their relationship to the level of production (Q). 4. Looking at the profit or loss figures at each level of production, what recommendations do you propose to Green Harvest farms to improve their profitability in the short term? Should they increase or decrease production, or maintain their current level? Explain your reasons. Application Instructions: Write a detailed report addressing the above sections. The report should be at least 500 words and not more than 1000 words, using double spaces in Times New Roman font, which is no more than 12 points in size Support your arguments with sources and evidence in APA format. Use high-quality, reliable, and relevant sources to find the right ideas for the style and type of writing.
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