You are discussing some investments with potential investors, and you want to understand what they are saying by using Time Value of Money concepts.

Problem 1:

Investor A has a goal of multiplying his investments by 10 times at the end of 5 years of holding an investment. What cost of capital is he implying?

Problem 2:

Investor B is looking at an investment where he could risk 50,000 euros with a horizon of 10 years and a cost of equity of 25% per year. What exit multiplier is he talking about?

Problem 3:

Investor B, with a cost of equity of 25%, invested 100,000 euros in a startup 5 years ago. At what minimum price would he sell his equity today in order to satisfy his investment goals?

Problem 4:

Investor C wishes to earn a 100% gain on his investments after 5 years. He invested 40,000 euros 6 years ago, and now he received an offer to buy his stake for 100,000 euros. Should he sell at that price to satisfy his stated goals?

Problem 5:

EBS Infinite Growth is a venture capital fund that invests in expansion stage opportunities with high growth potential in export markets. They use the VC method, for which they use a cost of capital of 40%, an exit horizon of 5 years and an EBITDA multiple at exit of 6 times. A target startup you are analyzing has a current EBITDA of 120,000 euros per year and expected growth of 15% per year during your investment horizon. You want to determine what percentage share of the target startup you would acquire, if you invest 70,000 euros in this opportunity.