Exhibit 5 VC Projections for 2009 Firm-wide Revenues and Costs under the Four Different PlanetTran Strategies Organic Growth Denver Chicago New York 2009 2009 2009 2009 Sales Revenue $4,600,000 $7,400,000 $10,300,000 $8,250,000 Cost of Sales 2,530,000 4,070,000 5,665,000 4,537,500 Gross Margin 2,070,000 3,330,000 4,635,000 3,712,500 Operating Costs 460,000 740,000 1,030,000 r: 20% 825,000 SGA 138,000 222,000 309,000 247,500 Ops New Hires 184,000 296,000 412,000 330,000 Marketing & Sales New Hires 368,000 592,000 824,000 660,000 PreTax Net Income 920,000 1,480,000 2,060,000 1,650,000 Taxes 322,000 518,000 721,000 577,500 Net Profit 598,000 962,000 1,339,000 1,072,5002. Assume the venture capital firm (VC) has a discount rate of 20%. Using the VC projections in Exhibit 5, which strategy would the VC prefer to take? 3. What ownership stake in PlanetTran should the VC receive if they decide to expand to New York? What stake should the VC receive for the other expansion strategies? What share should Riney agree to? Which strategy do you think PlanetTran will adopt? 4. What do these results imply about the market for venture capital funding of entrepreneurs? Hints: If any more assumptions you want to make, state them clearly, use DCF and NPV analysis to find out projections, compare the answers in 1 and 2, you will find why VC and Mr. Riney's have main conflicts. Support your arguments and answers with your own judgement and