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24 June, 10:14

You just founded a tech startup with an incredible ROI of 100%. That is, each dollar you invest in the firm creates a permanent increase of one dollar in earnings for all time. Unfortunately, like most good things, this ROI will be gone after two years (this means you can invest at ROI=100% at the end of years 1 and 2). After that, the ROI will lze 7%. You plan on reinvesting all earnings as long as its profitable, your return on equity is 10%, and your projected earnings for year 1 will be $10 million. What are the earnings for your startup at the end of year 3?

a. 40 million

b. 30 million

c. 20 million

d. 31 million

e. 19 million

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Answers (1)
  1. 24 June, 11:13
    0
    I believe it's c 20 million
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