Use the Information for the Question(s)below

question 26

Multiple Choice

Use the information for the question(s) below.
You founded your own firm three years ago.You initially contributed $200,000 of your own money and in return you received 2 million shares of stock.Since then,you have sold an additional 1 million shares of stock to angel investors.You are now considering raising capital from a venture capital firm.This venture capital firm would invest $5 million and would receive 2 million newly issued shares in return.
-Assuming that this is the venture capitalist's first investment in your firm,the post-money valuation of the angel investor's shares is closest to:

• A)$12.5 million.
• B)$4.0 million.
• C)$5.0 million.
• D)$2.5 million.

Understand and apply the measurement alternatives identified by the FASB for balance sheet elements.

Calculate and interpret working capital from balance sheet data.

Analyze the financial disclosure requirements for financial instruments.

Recognize the format and content that define the classification and recognition of assets, liabilities, and equity in the balance sheet.

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Definitions:

Problem-Solving Report

a document that outlines the process of identifying a problem, analyzing the causes, proposing solutions, and recommending actions.

Closure Report

A final document that summarizes the outcomes and status of a project at its completion.

Well-Written Headings

Concise, clear titles or headings that accurately reflect the content of a section or document.

Purpose Statement

A concise description aimed at defining the main objectives and guiding the actions of an entity.