A brief summary of the Frothy-Slope venture is given below. Formulate an answer for each of the five questions that are posed under the heading "What Is a Venture Worth?

Jim, the owner-manager of the Frothy-Slope microbrewery and restaurant in a small Colorado ski town, who has recently been the object of potential investor attention. The success of his first brewpub and the local popularity of his microbrews have resulted in a direct offer to invest $100,000 in ongoing operations and a desire to consider bottling and broader distribution. Although Jim has a business degree, complete with introductory exposures to accounting and finance, he is most comfortable overseeing the production of his handcrafted honey wheat ale. While he welcomes the eager investor, he also has no feeling for how much ownership he should be willing to sell in exchange for the $100,000 investment.

(1)What role, if any, does the $50,000 cash and the $81,900 sweat equity play in determining the post-financing ownership structure?Would the investor want less ownership if there had been two years of history rather than a year-and-a-half?