HIGHLIGHT/MARK ANSWERS

QUESTION 9 The internal rate of return is the compounded interest rate that equates the present value of the cash inflows received with the initial investment. a. True b. False Done 3 61 5 QUESTION 10 Post-money valuation of a venture is the pre-money valuation minus money injected by new OF investors. a. True b. False QUESTION 11 In staged financing, the expected effect of future dilution is borne by founders but not the investors currently seeking to invest. a. True b. False QUESTION 12 or is seeking to invest $500,000 in a venture, which currently has 1,000,000 targeting a 50% per year return for five years. The A potential invest million shares held by its founders, and is venture is expected to produce two million dollars in income similar venture recently produced $1,000,000 in income and sold shares to the public for $10,000,000 per year at year 5. It is known thata What is the percent ownership of our venture that must be sold in order to provide the venture investor's target return? a. 33.33 b. 75.94% C. 18.98% d. 15.67% yenture, which currently has 1,000,000 turn for five years. The mown that a