An Angel investor recently told you that he likes to get 5x return on his investment in 3 years. What is the discount rate (we are assuming that the discount rate is equal to the internal rate of return in the question) he is referring to in order to get these results. Pick the best answer (rounded)
Group of answer choices
58.49%
71.00%
49.53%
47.58%

Answers

Answer 1

The angel investor is referring to a discount rate of approximately 71.00% in order to achieve a 5x return on his investment in 3 years. Option B

The discount rate that the angel investor is referring to in order to get a 5x return on his investment in 3 years can be calculated using the internal rate of return (IRR) formula. IRR is the rate at which the present value of expected future cash flows equals the initial investment.

In this case, the initial investment is assumed to be $1 and the expected future cash flows are 5x the initial investment, or $5.

The time period is 3 years. Using the IRR formula, we can solve for the discount rate that equates the present value of expected future cash flows to the initial investment.

The formula is: Initial Investment = Expected Future Cash Flows / (1 + Discount Rate) ^ Time Period $1 = $5 / (1 + Discount Rate) ^ 3
Simplifying this equation and solving for the discount rate, we get: Discount Rate = ((Expected Future Cash Flows / Initial Investment) ^ (1 / Time Period)) - 1 Discount Rate = ((5 / 1) ^ (1 / 3)) - 1

Discount Rate = 1.710 - 1

Discount Rate = 0.710 or 71.00% (rounded).

Therefore, this is a high rate of return and may indicate that the investment is high-risk. Option B

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Answer 2

To calculate the discount rate, we can use the formula: Present value = Future value / (1 + discount rate)^n .Where n is the number of years and the future value is the expected return of 5x the initial investment.

If the Angel investor wants a 5x return on his investment in 3 years, then the future value would be: Future value = 5 x initial investment . To calculate the discount rate, we can set the present value to the initial investment and solve for the discount rate:

Initial investment = Future value / (1 + discount rate)^n

Initial investment = 5 x initial investment / (1 + discount rate)^3

1 + discount rate = (5 x initial investment) / initial investment^(1/3)

1 + discount rate = 5^(1/3)

Discount rate = (5^(1/3)) - 1

Discount rate ≈ 0.7100 or 71.00%

Therefore, the discount rate the Angel investor is referring to in order to get a 5x return on his investment in 3 years is approximately 71.00%.

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Related Questions

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Answers

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Besides individuals, who else pays taxes in our country?

Answers

Answer:

Aliens?

Explanation:

Which economic system is based on an idea of equality of result; that regardless of how well off somebody starts, all
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Answers

B. Command

What your describing sounds a lot like communism which would be found under a command economic system

Answer:

D.Market

Explanation:

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Answers

USES ( APPLICATIONS) of spreadsheet are;

1) to create budgets : Excel can be used in creation of budget s which is the estimation of revenue as well as expenses which covers specified future period of time.

2)produce graphs and charts: it's application is helpful in creating graphs in mathematics as well as statistics

3 for storing and sorting data: Data sorting can be done using spreadsheet. It involves arrangements of data into an order in order to make analysis of the data easier.

SPREADSHEET APPLICATION

1)Microsoft Excel : This is used in data

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2)LibreOffice : it's applicable in Calc for a free as well as native spreadsheet app.

4) Smartsheet: is useful when handling

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Answers

Answer:

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Answer:

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Answers

Answer:

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Explanation:

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10 more tons of clothing

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Answers

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Answers

Answer: the mythical man-month effect

Explanation:

The scenario given in the question above signifies the mythical man-month effect.

According to the mythical man-month effect, it explains that when more programmers are added to a particular project, this eventually led to a delay in the project.

Since we are told that Devon needs more coders to complete the project on time and therefore hired more people to complete the project but eventually led to a delay, thus signifies the mythical man-month effect.

what are vital events?

Answers

Answer:

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Explanation:


Description
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Answer:

TMS

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Answer:

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Answer:

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Select all that apply.
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Answers

Answer: all of the above.

Why? Because all of them are important in a conversation!
speaking to avoid awkwardness is good so you won’t end up ruining the conversation without realizing and giving the other person a bad impression about yourself. And not panicking is quite important too, because when you panic and get negative thoughts you’ll realize that it’s keeping you down and making you feel bad or anxious about every single word you say. And lastly collecting your thoughts and putting them in order (few seconds before starting a conversation) can be helpful to most people which will make them feel more confident and prepare especially if the conversation was serious.

Answer:

You should not panic

AND

Take a moment to collect your thoughts before you speak.

Explanation:

Hope this helps!

HELP ME PLEASE!!!
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Answers

Answer:

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Answers

Answer: See Explanation

Explanation:

Some of the behaviors that would be considered irresponsible in the workplace include:

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1.2.
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Answers

Answer:

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Question 2 (1 point)
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Answers

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Answers

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Answers

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Answers

Answer:

is there more information for this question?

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Answer:

Comedy as a Profession is a great example.

Explanation:

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To explain this, scientists have stated that it is inherent in humans to laugh at the misfortune of others. However, this is just a theory and does not explain why we laugh at other kinds of comedy.

A plausible explanation (which is more recent in the parlance of psychology) is that people also laugh when certain expectations are defied in a very witty manner.

As a professional stand-up comedian, knowing all the rules and tricks is just one part of the coin. Being able to, either by practice or repeated efforts during practice, internalize these principles, practice them and effectively use them is the artistic part of the picture.

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Cheers!

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A. The total amount of money brought in by sales.

B. Gross domestic product is calculated.

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D. The maximum level of benefits is figured.​

Edit: Its not C

Answers

Answer:

A. The total amount of money brought in by sales.

Describe a situation where value at one level of the enterprise may not be seen as valuable at another level

Answers

Answer:

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Cheers

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Answers

Answer:

$67.50 per hour

Explanation:

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Modification of machine cost $12,000

Insurance of Factory Premises $28,000

Raw material Cost $118,250

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Answers

Answer:

A. $0

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Answers

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