Describe two ways for projecting a venture’s cash flows, and discuss when each is appropriate to use.
Answer to relevant QuestionsWhen forecasting cash flows, why is it important to consider the time period covered by the forecast? What issues should the entrepreneur consider when doing financial forecasts?1. What would you do, if you were Chang? Support your decision.2. Is there anything Chang should do in the future to avoid, or at least anticipate, such a situation?3. What lesson should Chang learn from this situation?Distinguish between informal venture capital and formal venture capital.Distinguish between bust-up LBOs and build-up LBOs.1. Do you agree with the Bonneaus’ decision to sell? Why or why not?2. Why did the buyers retain Ed as a consultant? 3. Do you see any problem with having the Bonneaus' son-in-law become the new chief operating officer?
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