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Angel Heart Investors Case Study

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Case 1
Angel Heart Investors (AHI) is a start-up venture capital for educational software applications. Two educational programs, Education System Application (ESA) and Education Market Analysts (EMA), need the capital investment from AHI. In exchange for ESA stock, the firm requires $600,000 in year 1, $600,000 in year 2 and $250,000 in year 3 over the coming three-year period. EMA asks AHI to provide $500,000, $350,000 and $400,000 for the three years respectively over the same three-year period. Although both investment opportunities are worth pursuing, AHI are willing to commit for both projects $800,000, $700,000 and 500,000$ at most each year.
From the financial perspective, the company’s objective should be to maximize the net present value of the total investment ESA and EMA. AHI’s financial analysis team estimates that 100% funding of the ESA project has a net present value of $1,800,000, and 100% funding of the EMA project has a net present value of $1,600,000. In order to achieve the financial objective, Excel Solve and LINGO System can be used to find out the recommended percentage of each project that AHI should fund. After processing the data, the result shows that the optimal solution for AHI is to fund 61% ESA project and 87% EMA project. Now, the net …show more content…

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