Question: 5. The TechTwo Corporation is about to begin producing and selling its prototype product. Annual cash flows for the next five years are forecasted as:

 5. The TechTwo Corporation is about to begin producing and selling

5. The TechTwo Corporation is about to begin producing and selling its prototype product. Annual cash flows for the next five years are forecasted as: NH Year 1 2 3 4 5 Cash Flow -$60,000 -$20,000 $100,000 $500,000 $800,000 a Assume annual cash flows are expected to remain at the $800,000 level after Year 5 (i.e., Year 6 and thereafter). If TechTwo investors want a 40 percent rate of return on their investment, calculate the venture's present value b Let's assume that Tech Two investors have valued the venture as requested in Part A. An outside Investor wants to invest $2,000,000 in Tech Two now (at the end of Year O). What percentage of ownership in the venture should the TechTwo investors give up to the outside investor for a $2,000,000 new investment

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