Year

1
2
3
4

Rate
50%
55%
60%
65%
70%
75%
80%
85%
88%
90%
95%
100%

Cash Flow
$
$ 200,000.00
########
########

50%
$
$ 88,888.89
$ 592,592.59
########
########

Equity FractionNPV
44%
########
50%
########
56% $ 787,109.38
63% $ 598,015.38
70% $ 434,130.34
77% $ 291,461.89
86% $ 166,742.87
95% $ 57,283.77
100% $
0.00
104% $ (39,141.81)
114% $ (124,386.57)
125% $ (200,000.00)

Investment
1000000

discount
Year

CF
Succes rate Expected CF
1 $
2 $200,000.00
80% $ 160,000.00
3 ########
60% $ 1,200,000.00
4 ########
40% $ 3,200,000.00
########

0.524485107
PV
$ 68,845.19
$338,697.26
$592,457.54

$ 1,000,000.00

Inv
6,000,000
Required Return 30x
Dollar Return
#########
Trailing NI
Sell Multiple
Dollar Sale
Low Stake
High Stake

#########

12x
#############
44%
67%

The hurdle rate is extremely hard to compute accurately because of the multitude of variables used i
Because the optimistic scenario only assumes success in the venture, there can be bias in the valuati

titude of variables used in its calculation.

can be bias in the valuation estimates.