Technology Ventures: From Idea to Enterprise 4th Edition by Thomas Byers,Richard Dorf ,Andrew Nelson

Exercise 3

3 A new entrepreneur is relatively risk-averse with a risk-adjusted constant Her opportunity cost is $100,000 before earning a regular salary from the venture in its second year. She also invests her savings of $50,000. Calculate the minimum annual return that will be acceptable to her in the second or third year.