Freeport-McMoRan (FCX)

[eddy2]

Your cool aid stand is in trouble. You have two options one is to move the stand the other is close it down.
And sell the asset and the products you purchased.

To move your stand it will take additional capital. You would like to put your stand up in Central Park New York. This will not be cheap. The lease is $10,000 a month. To make the sinergy of the move work you will need too sell the cart you have and double it’s size and purchase cost. You need capital to do this. You will also need an extra pair of hands per shift.

Now your selling a 104 cups of cool aid a day, seven days out of the year. You borrowed enough working capital at 6% interest too supply the operations for a year plus the cost of the new cart. All the new labor cost will come from the additional revenue.

A bank wouldn’t touch your capital request so you went to the much more expensive public markets. In this market the lender wants 6% return on his capital and his capital returned within a year.

So you sell his debt and pay him 6%. The public then owns his debt after a years time. The 6% is still charged “ retained earnings” Because the consortium of investors have capital assets over a million due too there ability too write there loses off against the tax’s already paid. You can state that every public company after stating bankruptcy is worth a million dollars. The money can be used to purchase another public company or a bond of some kind. It can’t be used too finance another enterprise on its own unless private capital is invested.

Sorry got off topic there. The question I’m imposing is can the moving of the cool aid stand too Central Park New York now become profitable.

I would like to also add that depreciation can be manipulated. You can make it appear too not come from fix costs and appear too come all from operational costs. The bottom line it has to come from somewhere. There are arguments that appreciation offsets depreciation but in reality all fixed assets are set aside in another entity and leased back too the company allowing collateral to be safeguarded from the operations of your cool aid stand. This adds the depreciation to go directly to the bottom line of the opporations of the cool aid stand.

Drink the cool aid. Study and no your bottom line. Is your cool aid stand making money ?