What is the expected rate of return on the software venture

Assignment Help Finance Basics
Reference no: EM131123688

A venture investor, BKAngel, is considering investing in a software venture opportunity. However, the rate of return to be realized next year is likely to vary with the economic climate that actually occurs. Following are three possible economic outcomes, the probability that each one will occur, and the rate of return projected for each outcome:

2042_h.jpg

A. What is the expected rate of return on the software venture?

B. Calculate the variance and standard deviation of the rates of return for the software venture.

C. Calculate the coefficient of variation of the rates of return for the software venture. If the coefficient of variation of the rates of return for BKAngel's prior venture investments is 1.5, would the software venture be considered as being less or morerisky?

 

 

Reference no: EM131123688

Questions Cloud

Analyze the importance of having good posture : Utilize the Medical Terminology video and the U.S. National Library of Medicine Medical Dictionary to address summarize the terms Osteology and Arthrology. Analyze the importance of having good posture
What is the expected rate of return on the venture : What is the expected rate of return on the venture? Calculate the variance and standard deviation of the rates of return for the venture.
What is the main function of an autonomic nervous system : What is the main function of an autonomic nervous system that consists of the parasympathetic and sympathetic divisions
Describe the major types of connective tissues : Describe the major types of connective tissues and give at least one example of the location of each type
What is the expected rate of return on the software venture : What is the expected rate of return on the software venture? Calculate the variance and standard deviation of the rates of return for the software venture.
Describe role the macromolecule plays in biological systems : Biological macromolecules are in general polymers. Name one class of biological macromolecule and the kind of monomer from which it is constructed, and briefly describe a role the macromolecule plays in biological systems
Write a paper about the global digital divide : Write a paper about The Global Digital Divide. Description and Definition, Current solutions, and Pick a current proposal that you think will be a legitimate effort toward successfully eliminating the Global Digital Divide.
Discuss somatic cell reprogramming with transcription factor : Discuss somatic cell reprogramming with transcription factors and microRNA for cardiac tissue regeneration in animals. What is the treatment for scar tissue in soft tissue areas around joints and ligaments (contractures)
What is the congressional purpose for allowing tax deferral : 21. [LO 3] What is the Congressional purpose for allowing tax deferral on transactions that meet the definition of a corporate reorganization?22. [LO 3] Why do publicly-traded corporations use a triangular form of Type A reorganization in acquiring o..

Reviews

Write a Review

Finance Basics Questions & Answers

  How do you explain the use of time value of money

How do you explain the use of time value of money

  Fullerton companys bonds are currently selling for 120000

fullerton companys bonds are currently selling for 1200.00 per 1000 par-value bond. the bonds have a 10 coupon rate and

  Under what circumstances would the firm maintain

Suppose that a firm wishes to maintain a capital structure that is consistent with an A senior debt rating. Under what circumstances would the firm maintain a lower degree of leverage than a cross section of single-A-rated firms?

  Calculating earnings before income tax-depreciation

Your firm has net income of $198 on total sales of $1,200. Costs are $715, depreciation is $145 and amortization is $55. The tax rate is 34%. The firm does not have any interest expense. What is your firm's EBITDA?

  Find the dollar amount of each payment

Jan sold her house on December 31 and took a $10,000 loan as part of the payment. The ten year mortgage has a 10 percent nominal interest rate, but it calls for semiannual payments starting next June 30.

  Which of the following will occur if the stock price increas

Warner Motors's stock is trading at $20 a share. Call options that expire in three months with a strike price of $20 sell for $1.50. Which of the following will occur if the stock price increases 10%, to $22 a share?

  What happened to the price of your bond

Right away, market interest rates jumped, and the YTM on your bond rose to 6 percent. What happened to the price of your bond?

  Qlet the following situation on november 1 2013 incoming

q.let the following situation. on november 1 2013 incoming federal reserve chaireach son janet yellin states

  Detailing the cost

The buying department has found an excellent global positioning system circuit card in Germany that can provide your company with a competitive advantage in the marketplace.

  Annual compensation cost of a fully-staffed pat

If a company pays a PAT member a base wage of $24,000, a PAT incentive bonus of $1 per camera assembled, a $75 quarterly bonus for perfect attendance, and annual fringe benefits of $3,000, then the annual compensation cost of a fully-staffed PAT wo..

  Decision tree analysis-investment options

Marcal Corporation is considering foreign direct investment in Asia. The company approximates that the project would require an initial investment of $14 million. Discuss 2-3 factors other than the value of the real option that the company should c..

  A high school graduate makes a base salary

A high school graduate makes a base salary of $100,000. The average time to complete college is 4 years. Write the regression equation for the relationship between salary (Y) and years of college education (X) assuming that salary is insensitive ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd