A start-up chemical company has an average cost of capital of 11% per year. Additionally, it has a long-term goal of making at least a 21% per year rate of return on all investments; however, because of market opportunity the ROR can be reduced for the current project by 3%. If the company acquired $70,000,000 in venture capital, how much did it have to earn in the first year? In the first vear the chemical company had to earn $ 490000c

A start-up chemical company has an average cost of capital of 11% per year. Additionally, it has a long-term goal of making at least a 21% per year rate of return on all investments; however, because of market opportunity the ROR can be reduced for the current project by 3%. If the company acquired $70,000,000 in venture capital, how much did it have to earn in the first year? In the first vear the chemical company had to earn $ 490000c

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A start-up chemical company has an average cost of capital of 11% per year.
Additionally, it has a long-term goal of making at least a 21% per year rate of
return on all investments; however, because of market opportunity the ROR
can be reduced for the current project by 3%. If the company acquired
$70,000,000 in venture capital, how much did it have to earn in the first
year?
In the first year, the chemical company had to earn $ 4900000

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