After another year, Biwei’s business is in rapid expansion. He wants to raise $1M new capital. He can finance by taking a loan o

Question

3 years ago

9

After another year, Biwei’s business is in rapid expansion. He wants to raise $1M new capital. He can finance by taking a loan o

r issuing stock shares. The market interest rate for a loan is 5%. For an angel investor, injecting $1M into Biwei’s business will dilute 50% of Biwei’s ownership. What is the capital cost of Biwei’s business expansion?

Business

1 answer:

Snezhnost [94] · Answer 1 · 2022-07-27T03:08:46+03:00

Snezhnost [94]3 years ago

8 0

Answer:The capital cost is $1 million

Explanation: This is one time expenses on production if goods and services , purchase of land and construction. It is the total cost required to bring a business to a commercially operable status.