Use the Table for the Question(s)below

question 92

Multiple Choice

Use the table for the question(s) below.
The founder of a company issues 100,000 shares of series A stock for his own $250,000 investment.He then goes through three further rounds of investment,as shown below:

-Which of the following is closest to the percentage of the company owned by the founder of the company?

• A)11.2%
• B)12.5%
• C)25.0%
• D)37.5%
• E)42%

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Definitions:

NPV

Net Present Value, a calculation used to estimate the profitability of an investment or project by summing the present values of all expected future cash flows.

Probability

The measure of the likelihood that an event will occur, expressed as a number between 0 and 1, where 1 indicates certainty.

Capital Budgeting

The process by which a business evaluates and selects long-term investments that are expected to yield returns over a period of time.

Risk Character

A term describing the unique attributes and level of risk associated with an investment or financial decision.