True / False

1. Dilution represents the ability of venture capitalists to take advantage of the companys founders. This is why venture capital ultimately is a barrier to business development. True / False

2. A firm has a rule. Only consider investments that are expected to return at least 4% points above the company's cost of capital. The company's cost of capital is 11%. Project X will cost $1 million at time zero and generate $0 per year for five years and then pay $2 million in year 6. Beyond year six the project has no value to the company. . The company should consider this project since its IRR is more than 4% points above its cost of capital. True / False

3. A firm has a rule. Only consider investments that are expected to return at least 4% points above the company's cost of capital. The company's cost of capital is 11%. Project X will cost $1 million at time zero and generate $400,000 per year for five years. After five years the project is worthless. The company should consider this project since its IRR is more than 4% points above its cost of capital. True / False