Day: February 8, 2025

In which of the following projects would a venture capital organisation be least likely to invest?

Select ONE answer:

1. A business start-up
2. A management buyout
3. Renovation of a production facility
4. Replacement of an existing production line with a process using a new technology

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == > Venture capital is generally most appropriate for new investments with above average risk. Renovation of an existing facility is a part of the ongoing activity of the business and is unlikely to have much impact on the overall level of returns. It is therefore unlikely to be appropriate for a venture capital investment.
4. Not correct

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