Lecture 2 - Economics and Financing of Waste Management

The price of something is the sum of several different costs. In order to manage a business, these costs have to be analysed; which is why it is useful to classify the costs into different types of costs. The slides below summarise a few types of costs. For example there are fixed and variable costs. Fixed costs have to be payed no matter how much waste you want to treat and variable cost increase per unit; in other words: if you have less waste you also have to pay less. 

Before you look at the slides, why don't you try to write down some types of costs you already know and compare them with the slides later? 

Also, when you start a business you have to invest a lot of money up-front, before receiving revenues. Saving and using only your money is very unrealistic as you need a business first before you have a job in order to earn the money. Hence, it is common praxis for large projects to borrow money from a bank or a different creditor and come up with a pay-back sheme taking into account when your revenus will start coming in and inflation. Make sure you look at the slide on equity and borrow capital!