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R.K. Maroon is a seed-stage web-oriented entertainment company with important intellectual property. RKMs founders, all...

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Accounting

R.K. Maroon is a seed-stage web-oriented entertainment company with important intellectual property. RKMs founders, all technology experts in the relevant area, are anticipating a quick leap to dot-com fortune and believe that their unique intellectual property will allow them to achieve a subsequent (year 3) $100,000,000 venture value with a one-time initial $2,000,000 in venture financing.

In contrast, similar dot-commers in their niche are currently seeking multistage financing amounting to $10,000,000 to achieve comparable results. The founders have organized with 1,000,000 shares and are willing to grant venture investors a 100% return on their business plan projections.

Question 1

Assuming a second round in year 2 of $8,000,000 with a 40% return. What is the pre-money valuation at the 2nd round? Round by the nearest whole number, no decimal points.

Question 2

Assuming a second round in year 2 of $8,000,000 with a 40% return. What is the post-money valuation at the 2nd round? Round by the nearest whole number, no decimal points.

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