Question
For the next 2 questions, assume the following: ACME Software Company has CURRENT (i.e. today; year zero) market value of its venture's assets of $250K
For the next 2 questions, assume the following:
ACME Software Company has CURRENT (i.e. today; year "zero") market value of its venture's assets of $250K (effectively its current equity valuation cash flow). Forecasted cash-flows for next 5 years is as follows:
Year 1: ($350,000), i.e. negative
Year 2: ($100,000)
Year 3: $250,000, i.e. positive
Year 4: $450,000
Year 5: $500,000
Year 6+: Assume $600K in year 6, growing at 6% annually thereafter
Years 1-5 discount rate of 40%
Years 6+ assume 15% given company should be more mature, less risky, and more predictable..
What is the PV and NPV of ACME Software?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started