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Want to determine the amount of capital a company must raise in the first five years of the company in order to be successful. The
Want to determine the amount of capital a company must raise in the first five years of the company in order to be successful. The CEO has outlined the following strategy for the company. Year : Hire key employees, develop platform, protect intellectual property; Year : Product launch, gather feedback, and first marketing push; Year : Brand consolidation and platform upgrades; Year : National expansion; Year : Launch in foreign territories
The CFO of the company made some projections and came up with the following summary of their expected revenue and expenses for each quarter of the next five years.
Quarter Revenue Expenses
YQ $ $
YQ $ $
YQ $ $
YQ $ $
YQ $ $
YQ $ $
YQ $ $
YQ $ $
YQ $ $
YQ $ $
YQ $ $
YQ $ $
YQ $ $
YQ $ $
YQ $ $
YQ $ $
YQ $ $
YQ $ $
YQ $ $
From the chart, answer the following questions:
Attempt to draw a Jcurve for the company.
What is their peak cash need?
How long does it take for their operations to break even?
How long does it take until they reach the actual break even point?
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