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1. Which one of the following might explain reporting negative net earnings and positive cash flow simultaneously? Select one:
a. The firm may have high depreciation and amortization.
b. It is not possible.
c. The firm may be subject to high tax brackets.
d. The firm may be reaching the break-even point.
2. Which one of the following is true for venture capital?
Select one:
a. Venture capitalists only invest in public companies.
b. Venture capital firms are intermediaries between investors and firms.
c. Best exit strategy after a venture capital investment is liquidation.
d. Venture capitalists have a lower cost of capital than angel investors.
3. Which one of the following is true for investment milestones and valuation milestones?
Select one:
a. Valuation milestones allow an investor to postpone payments until the milestone is reached.
b. Investment milestones allows for reallocation of company ownership.
c. Ownership reallocation following milestones can only be negative (decreased value).
d. If an investment milestone is not reached, investor can postpone both initial and subsequent payments.
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