Assume the capital injection was in the form of preferred stock which carries a 10% rate. Assume the VC has $500k in preferred AND 50% of the common for this investment. Assume each year, all earnings (cash flow above) is paid out to preferred and common equity holders. First, Preferred shareholders earn their rate of return (preferred dividends) then remaining is divided by all common shareholders. What is the IRR to the VC in this scenario? What is the IRR achieved for the VC?