Data analytics have big attention from our industry in the current days. As a recent graduate, you would like to adventure in the creation of a new company in this area. To set up the company you will need to invest about $500,000 at the beginning (time 0). The yearly operating cost and salaries of the company are about $400,000 per year and it is expected to be constant. The projected incomes are about $300,000 for the first year increasing about 30% every year. With this information answer the following
question:
1. Draw the cash flow diagram for this project? (10 points).
2. If you would like to have a rate of return of 25% in 6 years, how much you should sell the
company after six years of operation? (15 points)

Answer rating: 100% (QA)

1 Cash Flow Diagram Year 0 Initial Investment 500000 Year 1 Income 300000 Operating Cost and Salarie... View the full answer