StartCo is an early stage company whose financial plans call for the company to be sold in 5 years, at a valuation of $10 million. You are considering an investment of $100,000 in StartCo; you like the company but feel that it is fairly risky venture, so you want a 40% annual return on your investment.
What is the present value of StartCo, using your required rate of return as the discount rate?