1.

a.)An estimated proposal for a manufacturing operation shown to the BCH company has fixed costs of $300,000 per year and projects producing one product with a selling price of $72.00 and a variable cost of $42.00 per unit.

If the proposal specifies a maximum factory production capacity in this scenario to be 7,143 units per year and total sales to be 5,000 units per year, which of the following statements are accurate?

Select one:

a.This is acceptable as the proposal could be seen as highly likely to be profitable.

b.This is troublesome as the proposal could be seen as highly unlikely to be profitable.

c.The factory would do much better lowering their estimated sales target to 4,166 units

d.The factory would exceed their breakeven point by raising their estimated sales target to 7,143 units.

e.none of these

b.)

Assume an initial investor is going to invest $325,000 into your company using convertible notes.

Assume there is a cap in the terms of the note that says in the event that the company raises money again in the future, regardless of the valuation, the early-stage investor will convert all notes assuming the pre-money value obtained in the financing is $3 Million.

Assume there is a future funding round years later, and the pre-money valuation at that point is $9 Million, with the company raising money through selling equity at $1 / share.

At the point of the future funding round being realized, what will the early-stage investor's notes convert to?

a.The early-stage investor's notes convert at a price of $0.50 per share. The early stage investor receives 650,000 shares worth $325,000. This is a ~2X return.

b.The early-stage investor's notes convert at a price of $0.33 per share. The early stage investor receives 984,848 shares worth $984,848. This is a ~3X return.

c.None of these answers are correct.

d.The early-stage investor's notes convert at a price of $1 per share. The early stage investor receives 325,000 shares worth $325,000. This is a ~3X return.

e.The early-stage investor's notes convert at a price of $3 per share. The early stage investor receives 984,848 shares worth $975,000. This is a ~3X return.

c.)

Assume that an investor wants to make a $1.2 million investment in your company.

In the term sheet they have informed you they believe the pre money valuation of your company is $600,000.

If you accept this pre money valuation and investment in full, what proportion of the company's annual profits will the investor have to take as an owner's withdrawal?

a.There is not enough information provided to determine an answer.

c.2/3

d.All

e.1/3