Question
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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