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serious [3.7K]
4 years ago
14

You have purchased 1 million shares in a restaurant chain venture. At this zero-stage investment, your company's assets are $100

,000 plus the idea for your new product. Suppose that when you first approach your friendly VC, he decides that your shares are worth only $0.40 each.
a. How many shares will you need to sell to raise the additional $1,370,000?

b. What fraction of the firm will you own after the VC investment? (Round your answer to 1 decimal place.)
Business
1 answer:
rewona [7]4 years ago
5 0

Answer:

a. 3,425,000 shares

b. 22.60%

Explanation:

The calculations are presented below:

a. The number of shares sold is shown below:

= Additional amount ÷ share worth value

= 1,370,000 ÷ $0.40

= 3,425,000 shares

b. The fraction would be

= Number of shares purchased ÷ Total number of shares after considering the additional amount

= 1,000,000 ÷ 4,425,000

= 22.60%

The total number of shares would be

= 1,000,000 + 3,425,000

= 4,425,000

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3 years ago
"All three levels are required to run an organization or a business smoothy"Justify the statement.​
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For-profit businesses and nonprofit organizations are similar in that they both: a. contribute to the welfare of society. b. hav
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3 years ago
Find the value of C, which makes the following two cash flow series equivalent. Assume that the market interest rate is 6% per y
Svetradugi [14.3K]

Answer:

Find attached complete question.

$ 750.10  

Explanation:

In order to ascertain the value of C ,we need to equate the present value of the two streams of cash flows to each other as follows:

first stream:

$400/(1+6%)^1+$400/(1+6%)^2+$125/(1+6%)^3+$400/(1+6%)^4+$400/(1+6%)^5+$125/(1+6%)^6+$400/(1+6%)^7=$1,808.19  

Second stream:

C/(1+6%)^1+C/(1+6%)^2-$250/(1+6%)^3-$250/(1+6%)^4-$250/(1+6%)^5+C/(1+6%)^6+C/(1+6%)^7

-$250/(1+6%)^3-$250/(1+6%)^4-$250/(1+6%)^5=-$594.74

C/(1+6%)^1+C/(1+6%)^2+C/(1+6%)^6+C/(1+6%)^7=C/0.9434+C/0.8900+C/ 0.7050+C/ 0.6651  

simplification

C/0.9434+C/0.8900+C/ 0.7050+C/ 0.6651=C/(0.9434+0.8900+0.7050+0.6651)= 0.31216C

All in all:

$1,808.19 =-$594.74+ 0.31216C

$1,808.19+$594.74= 0.31216C

$2402.93 = 0.31216C

C=$2402.93* 0.31216  =$ 750.10  

5 0
3 years ago
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