A venture is expected to have an exit value of $10,000,000 two years from now. If venture investors invest $2,000,000 now, and expect a 20% compounded rate of return on their investment, what portion of the exit value would they need?

Question

Quizplus · Accepted Answer

To find the portion of the exit value needed, calculate the future value of the investment: $2,000,000 * (1 + 0.20)^2 = $2,880,000. The portion needed is $2,880,000 / $10,000,000 = 28.8%.

A Venture Is Expected to Have an Exit Value of $10,000,000