A Venture Is Expected to Have an Exit Value of $10,000,000

question 10

Multiple Choice

A venture is expected to have an exit value of $10,000,000 five years from now. If venture investors invest $1,000,000 now, and expect a 20% compounded rate of return on their investment, what portion of the exit value would they need?

• A) 10.5%
• B) 20.1%
• C) 24.9%
• D) 28.8%
• E) 32.5%

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Definitions:

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given time period.

ABC Analysis

A method of categorizing inventory into three classes, A, B, and C, based on their value, volume, or frequency, to prioritize management focus and resources.

SKU

Stock Keeping Unit, a unique identifier for each distinct product and service that can be purchased.