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As an analyst for a VC firm you are asked to value a proposed investment in a startup that expects to earn $500,000 three years
As an analyst for a VC firm you are asked to value a proposed investment in a startup that expects to earn $500,000 three years from now. Most of the firms you analyze have annual income of roughly $150,000 and are sold for about $1,000,000. Your firm demands a 40% return on all new venture investments. What is the estimated future value of this firm using the venture capital method for estimating values?
A. | 3,335,000 | ||
B. | 1,215,379 | ||
C. | 714,285 | ||
D. | 1,000,500 | ||
E. | none of the above |
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