John Savage Was an Engineer with an Idea for a Flexible

question 18

Multiple Choice

John Savage was an engineer with an idea for a flexible solar-energy material that would have a wide-range of military and civilian apparel applications.He estimates that he will need approximately $300,000 to develop a prototype.Friends and family could provide about $75,000.What would be the best source for the balance?

• A) Informal investors
• B) Venture capitalists
• C) A strategic partnership
• D) An SBA loan

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Definitions:

Capital Budgeting Request

A process in which a business evaluates and plans for future projects or investments, analyzing potential expenses and returns.

Weighted Average Cost of Capital (WACC)

Calculating a business's cost of capital by proportionally weighting each capital variety.

Riskiest Divisions

Business units or segments within a company that are subject to the highest levels of uncertainty and potential loss.

Positive NPV

A situation in which the net present value (NPV) of a project or investment is greater than zero, indicating that the projected earnings exceed the anticipated costs in present-value terms.