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Business, 21.10.2020 16:01 Seaqueen3103

5. A software startup, Lutoj, Inc., is developing a new smart home software product. Lutoj believes revenue must reach $5 million in Year 3 for the product to be viable. Lutoj’s operating margin (EBIT/Sales) is 20%, the tax rate is 30, and asset turnover is 5X. The founders have a total of $200,000 for initial equity funding. Assume Lutoj will pay no dividend. (15 points) a. With no other financing, will the $200,000 of founder investment be sufficient to achieve the Year 3 sales target? If not, what level of initial equity investment would be required?

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5. A software startup, Lutoj, Inc., is developing a new smart home software product. Lutoj believes...
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