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The amount the bank is willing to loan you to start your business is not enough to cover the initial investment you need to make.
The amount the bank is willing to loan you to start your business is not enough to cover the initial investment you need to make. You need an additional $10,000. You approach an investor and ask him to invest $10,000 in your business. In return, you offer to pay him $500 out of your profits at the end of years 1-4 and an amount X at the end of year 5. The investors annual cost of funds is 10%. How big must X be to induce him to invest in your business
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