General Statement: Perform a First Chicago (FC) valuation of PDC (Pamela Dharma Constance) manufacturer of the New-Age paint. We know that in this industry 30 percent of new venture do not survive after first four years, and only 20 percent become venture utopias. In addition, perform the valuation based on multiples and compare. The financial statements of PDC and utopia valuations are readily available in the textbook. Also, I provided a recap after the background section.

Background: Pamela, Dharma, and Constance, upon completing their undergraduate degrees, decided to start their own venture. They were able to acquire exclusive North American distribution rights for a new type of interior wall paint product, New-Age Paint, which emits a light fragrance when interior temperature changes and conveys a subtle color alteration as the mix of lighting changes from primarily solar to primarily incandescent (as a day matures). One of several different fragrances can be embedded in the paint; each fragrance has an expected useful life of five years with annual wipe-down of a "revitalizer." Pamela, Dharma, and Constance have formed the PDC Company to own the distribution rights. The founders believe they have a unique new product that can introduce a recurring revenue business model where none has previously existed. PDC inventories New-Age Paint that it plans to sell shortly after having received the paint. It is currently March 31, 2011, and the sales force has provided the following projected sales:

April $115,000

May $184,000

June $138,000

July $115,000

August $ 92,000