A potential investor is willing to provide $500,000 in first-round financing with the expectation of a 50% annual compound rate of return over the next five years. Founders

currently hold 1,000,000 million shares of stock. The venture is expected to produce $500,000 in net income in year 5. A similar firm with annual net income of S1,000,000 sold

shares to the public for $10,000,000. What is the value of the venture at the end of year 5 using direct capitalization?