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mylen [45]
3 years ago
15

Venture capital required rate of return. Blue Angel Investors has a success ratio of with its venture funding. Blue Angel requir

es a rate of return of for its portfolio of​ lending, and the average length on its loans is years. If you were to apply to Blue Angel for a ​$ ​loan, what is the annual percentage rate you would have to pay for this​ loan?
Business
1 answer:
Ksivusya [100]3 years ago
7 0

Complete Question:

Venture capital required rate of return. Blue Angel Investors has a success ratio of 10% with its venture funding. Blue Angel requires a rate of return of 20% for its portfolio of​ lending, and the average length on its loans is 5 years. If you were to apply to Blue Angel for a ​$100,000 ​loan, what is the annual percentage rate you would have to pay for this​ loan?

Answer:

Blue Angel Venture Capital

The annual percentage rate to be paid for this loan is:

= 38%

Explanation:

a) Data and Calculations:

Blue Angel Loan = $100,000

Required rate of interest = 20%

Average length of Blue Angel loan = 5 years

Success ratio of venture funding = 10%

Annual loss sustained from loan = 20% * (100% - 10%)

= 20% * 90%

= 18%

Therefore the annual percentage rate to be paid for this loan is:

38% (20 + 18%)

b) The implication is that the required rate of return expected by Blue Angel will be weighed by its failure rate of 90%.  This indicates additional cost of loan.  Therefore, the total annual percentage rate is the addition of the required rate of return and the rate of loss sustained.

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3 0
1 year ago
The account balances of Wilson Towing Service at June 30, 2016, follow:Equipment $12,950Office supplies 1,000Notes payable 4,500
andre [41]

Answer:

Wilson Towing Service

Income Statement

For the month ending June 30, 2016

Service revenue        $12,500

Salaries expense      ($2,500)

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Operating profit         $9,500

The income statement tells us how much profit/loss did a business make during a certain period of time. In this case, the operating profit was $9,500. In order to calculate net income we would need to subtract taxes but we are not given the tax rate or the taxes due.

8 0
3 years ago
Which of the following is NOT one of the responsibilities of the Federal Reserve?
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The Board of Governors, also known as the Federal Reserve Board, is the national component of the Federal Reserve System. The board consists of the seven governors, appointed by the president and confirmed by the Senate. Governors serve 14-year, staggered terms to ensure stability and continuity over time. The chairman and vice-chairman are appointed to four-year terms and may be reappointed subject to term limitations.
 
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3 years ago
During its first year of operations, Bramble Corp. had these transactions pertaining to its common stock. Jan. 10 Issued 25,200
crimeas [40]

Answer and Explanation:

The journal entries are shown below:

a.

On Jan 10

Cash Dr $100,800 (25200 shares × $4 )

              To Common Stock  $100,800

(Being the common stock is issued)

To record this, we debited the cash as it increased the assets and, at the same time, it also increased the total equity of the stockholder so common stock is credited

On July 1

Cash $357,000  (51,000 shares × $7)

     To Common stock $204,000  (51,000 shares × $4)

      To Additional Paid in capital in excess of par value - Common stock   $153,000  (51,000 shares × $3)

(Being the issuance of the common stock is recorded)

To record this, we debited the cash as it increased the assets and, at the same time, it also increased the total equity of the stockholder and the common stock is credited with the additional capital paid for common stock

b.

On Jan 10

Cash $100,800  (25,200 shares × $4)

     To Common stock $25,200  (25,200 shares × $1)

      To Additional Paid in capital in - Common stock   $75,600   (25,200 shares × $3)

(Being the issuance of the common stock is recorded)

To record this, we debited the cash as it increased the assets and, at the same time, it also increased the total equity of the stockholder and the common stock is credited with the additional capital paid for common stock

On July 1

Cash $357,000  (51,000 shares × $7)

     To Common stock $51,000  (51,000 shares × $1)

      To Additional Paid in capital in - Common stock   $306,000   (51,000 shares × $6)

(Being the issuance of the common stock is recorded)

To record this, we debited the cash as it increased the assets and, at the same time, it also increased the total equity of the stockholder and the common stock is credited with the additional capital paid for common stock

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Answer: Cost Approach

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The best method Vincent should use for valuation is the cost approach.

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