
Bundle: Contemporary Financial Management, 14th + MindTap Finance, 1 term (6 months) Printed Access Card
14th Edition
ISBN: 9781337587563
Author: MOYER, R. Charles; McGuigan, James R.; Rao, Ramesh P.
Publisher: Cengage Learning
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Question
Chapter 17, Problem 11QTD
Summary Introduction
To discuss: The types of marketable securities that are suitable for firm’s portfolio and the characteristics these securities are desirable investments for idle cash balances.
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Students have asked these similar questions
Your firm is contemplating the purchase of a new $610,000 computer-based order entry system. The system will be depreciated
straight-line to zero over its five-year life. It will be worth $66,000 at the end of that time. You will save $240,000 before taxes per year
in order processing costs, and you will be able to reduce working capital by $81,000 (this is a one-time reduction). If the tax rate is 21
percent, what is the IRR for this project?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
IRR
%
QUESTION 1
Examine the information provided below and answer the following question.
(10 MARKS)
The hockey stick model of start-up financing, illustrated by the diagram below, has received a lot of attention in the
entrepreneurial finance literature (Cumming & Johan, 2013; Kaplan & Strömberg, 2014; Gompers & Lerner, 2020). The model
is often used to describe the typical funding and growth trajectory of many startups. The model emphasizes three main
stages, each of which reflects a different phase of growth, risk, and funding expectations.
Entrepreneur, 3 F's
Debt(banks & microfinance)
Research Business angels/Angel Venture funds/Venture capitalists
Merger, Acquisition
Grants
investors
PO
Public market
Growth (revenue)
Break even
point
Pide
1st round
Expansion
2nd round
3rd round
Research
commercial idea
Pre-seed
Initial concept
Seed
Early
Expansion
Financial stage
Late
IPO
Inception and
prototype
Figure 1. The hockey stick model of start-up financing (Lasrado & Lugmayr, 2013)
REQUIRED:…
critically discuss the hockey stick model of a start-up financing. In your response, explain the model and discibe its three main stages, highlighting the key characteristics of each stage in terms of growth, risk, and funding expectations.
Chapter 17 Solutions
Bundle: Contemporary Financial Management, 14th + MindTap Finance, 1 term (6 months) Printed Access Card
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