Venture capitalists typically provide funds to high-risk startup companies but take no active role

David N. Goliath is planning to open a sporting goods store. However, the initial investment is $120,000. He currently has this money in a certificate of deposit earning 10 percent. He may leave it there if he decides not to open the store

If he opens the store and it is successful he will generate a profit of $50,000. If it is not successful, he will lose $90,000. What would the probability of a successful store have to be for David to prefer this to investing in a CD?

Time value of money should be ignored in capital budgeting techniques to make accurate decisions

Indicate whether the statement is true or false