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A. Assume you factor your accounts receivable balance of $100,000 for an upfront payment of $40,000 today. The third party collects the $40,000 plus the

A. Assume you factor your accounts receivable balance of $100,000 for an upfront payment of $40,000 today. The third party collects the $40,000 plus the remaining $60,000. Normally what would you receive from the third party after they finish the collection process?

The $60,000 minus a fee.

Nothing. The third party keeps the whole $60,000.

The entire $60,000.

$30,000.

B. On average, how many startups (in the United States) utilize bootstrapping as a strategy for launching their company?

All of them

Less than 20%

70%

None of them

C. Your company forecasts the following cash flows.

Year 1: $450,000

Year 2: $600,000

Year 3: $880,000

Discount rate is 30%. Tax rate is 25%. Net income in Year 3 is $300,000. Using the DCF method, calculate the company's current value.

$400,546

$346,153

$1,030,000

$1,101,729

D. Your company has the following forecast for net income.

Year 1: $100,000

Year 2: $200,000

Year 3: $300,000

Discount rate is 35%. Applicable P/E ratio is 7X. Calculate the company's value today using the VC method.

$735,000

$100,000

$853,528

$2,100,000

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