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Questions and Answers
In the context of investing, when do VCs typically invest compared to angel investors and private equity firms?
In the context of investing, when do VCs typically invest compared to angel investors and private equity firms?
- Before angel investors but after private equity firms
- After both angel investors and private equity firms
- Before private equity firms but after angel investors (correct)
- Before angel investors and before private equity firms
Which of the following is NOT a downside of using Net Present Value?
Which of the following is NOT a downside of using Net Present Value?
- Multiple IRRs
- Sensitive to discount rate
- Dynamic assumptions
- Includes Real options (correct)
What is a key drawback of using the Net Present Value method?
What is a key drawback of using the Net Present Value method?
- Includes many real options
- Produces multiple IRRs (correct)
- Is not affected by the discount rate
- Requires static assumptions
Why is the Net Present Value method considered sensitive to the discount rate?
Why is the Net Present Value method considered sensitive to the discount rate?
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Which factor makes Net Present Value different from other valuation methods that may result in multiple IRRs?
Which factor makes Net Present Value different from other valuation methods that may result in multiple IRRs?
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