An investor on the "Shark Tank" has offered an entrepreneur a deal with his company. Part of the deal is the investor wants a royalty on his investment. The investor will "lend" the entrepreneur $293,125.00 but wants $2.00 per unit sold. The entrepreneur expects to sell 22,185.00 units per year each year going forward in perpetuity. What is the IRR for the investor?

An investor on the "Shark Tank" has offered an entrepreneur a deal with his company. Part of the deal is the investor wants a royalty on his investment. The investor will "lend" the entrepreneur $293,125.00 but wants $2.00 per unit sold. The entrepreneur expects to sell 22,185.00 units per year each year going forward in perpetuity. What is the IRR for the investor?

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter11: Venture Capital Valuation Methods

Section: Chapter Questions

Problem 1dM

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