1. Annie is prepared to offer 20% ownership of her company in exchange for no less than $200,000. Based on this information, how much does Annie think her company is worth without any additional investment?

a.) $400,000

b.) $800,000

2. Based on a discounted cash flow calculation Billy completed with his co-founder, he believes that their entirely bootstrapped startup currently is worth around $400,000. A potential investor just offered $50,000 in exchange for 10% ownership in the company. Based on this information, please fill in the blank:

The investor's pre-money valuation of the company is ____________ than that of the co-founders.

a.) $100,000 lower

b.) $50,000 higher