Venture investors usually buy common stock in firms

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1. Assume General Motors has a weighted average cost of capital of 10%. GM is considering investing in a new plant that will save the company $30 million over each of the first two years, and then $25 million each year thereafter. If the investment is $150 million, what is the net present value (NPV) of the project?

A) $65.2 million B) -$76.1 million C) -$86.9 million D) $108.7 million

2. Venture investors usually buy common stock in firms.

True

False

3. Modern venture capital investment dates back to before World War I.

True

False

Reference no: EM131899702

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