1. Individual or limited partner venture capitalists generally:

A. seek an exit strategy.

B. provide only seed money to start-up firms.

C. tend to be long-term investors.

D. are easy to contact.

E. request less than 25 percent ownership.

2. Which of these may occur if a company uses its overall cost of capital as the discount rate for all projects? I. Profitable low-risk projects may be incorrectly rejected. II. Only projects with risks similar to the current company will be accepted. III. Too many high-risk projects may be accepted. IV. Only low-risk projects will be accepted.

A. Profitable low-risk projects may be incorrectly rejected.

B. II only

C. II and IV only

D. I and III only

E. I and IV only

F. I, II, and III only