For Questions $4$ through $9,$ assume you are the manager of a venture capital fund, and a bank is offering to loan $$20$ million of the $$55$ million financing requirement. The after$-$tax cash outflows to service the bank debt are $$5,$$$5,$$$5,$$$5,$ and $$10$ million in Years $1$ through $5,$ respectively. You are considering providing an equity investment for the remaining $$35$ million required by AFC.

$4.$ List three questions you might ask Dr$.$ Aplin in your meeting with him.

Venture Capital Funds. Some financial institutions $($insurance companies, pension funds, and the like$)$ and wealthy individuals earmark a certain portion of their investment portfolios for high$-$risk investments. Much of this capital is placed into venture capital funds, which are managed by highly experienced professionals called venture capitalists. Venture capitalists invest the fund's capital in the equity $($either stock or convertible debentures$)$ of new, fast growing businesses. Because of the very high risk associated with such investments, venture capitalists require a high rate of return, typically in the twenty to sixty percent range.