Simone Founded Her Company Using $150,000 of Her Own Money,issuing

question 41

Multiple Choice

Simone founded her company using $150,000 of her own money,issuing herself 300,000 shares of stock.An angel investor bought an additional 200,000 shares for $100,000.She now sells another 500,000 shares of stock to a venture capitalist for $2 million.What is the post-money valuation of the company?

• A)$2,000,000
• B)$2,250,000
• C)$4,000,000
• D)$6,000,000

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Definitions:

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the organization's goal of maximizing shareholder value.

Straight-Line Depreciation

A process for breaking down the expenditure of a solid asset throughout its useful life in identical yearly quotas.

Discount Factor

A multiplier used to determine the present value of future cash flows by accounting for time and interest.

Capital Budgeting

It refers to the process by which companies evaluate and select major investment projects, considering their potential long-term profitability.