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## Finance and capital markets

### Course: Finance and capital markets>Unit 3

Lesson 4: Capacity utilization and inflation

# Cupcake economics 2

## Want to join the conversation?

• You said, "If you just click the slash here you'll see everything in the download directory".

• Shouldn't the plant investment be apportioned several years unless you have to buy a new plant every year.
• Typically, when a company purchases a long term asset like a building, it will finance with a loan much like a home mortgage. The monthly mortgage would be accounted for in the overhead. In his example he wanted to show the full cost of the building as a one time initial investment (cash investment) in order to view the return (profits) on investments (\$1.1 million). The return on investments (ROI) is used to view how good or bad an investment is compared to the market's return (average return).
• Can I view the Download directory listings? Is there a page for that directory?
• LOL, putting nicotine in cupcakes! 😂
• What is the name of the type of graph that Sal uses? I looked up "3D zero curve" and nothing came up.
• Can somebody explain how to create a sensitivity analysis table on excel like the one Sal has in his video? I tried to enter the same formula that Sal has in his excel file, but I am having errors come up. Any help?
• How are u break if u sell 750,000 cupcakes per year?
• ahh i see.
(1 vote)
• I'm confused about what capacity is. Can you clarify?
(1 vote)
• How many cupcakes a factory can make per year. For Sal's, one million. And Imran's: two million (maybe because there are more machines/better workers/more efficient machines etcs.).
• What is operating income.
Is that just net Profit after calculating in overhead cost?
(1 vote)
• profit before interest an taxes.
Operating Income = Gross Income - Operating Expenses - Depreciation & Amortization
(1 vote)
• what is Income Analysis??
(1 vote)
• Income analysis is when you analyse your income by calculating everything. E.g. revenue, cost, maintenance fee, wages, expenses, etc...
(1 vote)