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Business, 11.02.2020 18:51 paigebmaxwell6062

A venture capital firm is considering investing in a company. Assume the discount rate is 20%. The first four years, the VC firm would be paying into the company. The payments from the VC firm would equal $5 million a year (starting at the end of the year). In return, the VC firm expects that it would receive payments equal to $10 million for the following four years (end of year 5 to the end of year 8). Should the VC firm invest in this company. a.

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