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As an analyst for a venture capital firm you have been asked to evaluate an $ 1 8 million investment in a startup company. You
As an analyst for a venture capital firm you have been asked to evaluate an $ million investment in a startup company. You project that there will be no cash flows for six years but that the investment made would be worth $ million in six years. Given the riskiness of the investment opportunity, your firm requires a annual rate of return. a What is the NPV of this investment opportunity? b Should the venture capital firm accept the investment opportunity? c Calculate the IRR. d According to the IRR, should the venture capital firm accept the investment opportunity?
As an analyst for a venture capital firm you have been asked to evaluate an $ million investment in a startup company. You project that there will be no cash flows for six years but that the investment made would be worth $ million in six years. Given the riskiness of the investment opportunity, your firm requires a annual rate of return. a What is the NPV of this investment opportunity? b Should the venture capital firm accept the investment opportunity? c Calculate the IRR. d According to the IRR, should the venture capital firm accept the investment opportunity?
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Public Finance And Public Policy
Authors: Arye L. Hillman
2nd Edition
0521738059, 978-0521738057
