Use the Information for the Question(s)below

question 27

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.
-The post-money valuation of your firm is closest to:

• A)$12.5 million.
• B)$5.2 million.
• C)$10.0 million.
• D)$5.0 million.

Analyze the average rate of return on investment for capital projects.

Understand the concept and significance of Net Present Value (NPV) in evaluating capital investments.

Be able to calculate the Net Present Value of various investment proposals using present value factors.

Comprehend the concept of the time value of money and its importance in capital budgeting decisions.

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Definitions:

Telepathy

The purported transmission of information from one person to another without using any known human sensory channels or physical interaction.

Context Effect

The influence of environmental factors on one’s perception, decision making, or cognition.

Proximity

The state of being close or near in space, time, or relationship, which can influence social connections and interactions.

Interposition

A visual cue in perception that occurs when one object partially blocks another, which can be used to perceive depth and spatial relationships.