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Your best friend is a successful sole proprietor. Per the most recent valuation, the FMV...

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Accounting

Your best friend is a successful sole proprietor. Per the most recent valuation, the FMV of his business is $2 million. He wants to grow the business and ask you to invest $2 million cash in exchange for 50% share of the new business. Per the business plan, the company is expected to generate ($300,000) loss in year 1,($100,000) loss in year 2, $100,000 income in year 3, $500,000 income in year 4, and $1 million in year 5 but there is no guarantee for such future performance.

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