5.A venture capitalist firm wants to invest $1.5 million in your NYDeli dot.com venture that you started
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5.A venture capitalist firm wants to invest $1.5 million in your NYDeli dot.com venture that you started six months ago.You do not expect to make a profit until year four when your net income is expected to be $3 million.The common stock of BioSystems, a "comparable" firm, currently trades in the over-the-counter market at $30 per share.BioSystems' net income for the most recent year was $300,000 and the firm has 150,000 shares of common stock outstanding. If VCs want a 40% compound annual rate of return on similar investments, what is the present value of your NYDeli venture?
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