THE JOURNAL OF FINANCE • VOL. LX, NO. 4 • AUGUST 2005 Private Equity Performance: Returns, Persistence, and Capital Flows STEVEN N. KAPLAN and ANTOINETTE SCHOAR∗ ABSTRACT This paper investigates the performance and capital inf lows of private equity partnerships. Average fund returns (net of fees) approximately equal the S&P 500 although substantial heterogeneity across funds exists. Returns persist strongly across subsequent funds of a partnership. Better performing partnerships are more likely
Words: 17741 - Pages: 71
Option B. For Option B, it took 4.33 years to pay off B’s initial investment. The next step is to calculate the Internal Rate of Return (IRR). The IRR is a rate of return used in capital budgeting to measure and compare the profitability of investments. In Excel is calculated by =IRR ( ) by the sum of initial investment and the benefits obtained. For Option A the IRR is 18.96%, and Option B is 25.53%. The last step is to determine the Net Present worth (NPV) is defined as the difference between the
Words: 841 - Pages: 4
presented to the committee with a “dashboard” that summarizes the critical inputs used to compute the net present value (NPV) and internal rate of return (IRR). The dashboards also contain data about the type of investment (new store or remodel), market size, location, customer-demographic information, as well as the sensitivity of NPV and IRR to changes in various inputs. In addition to the factors influencing the economics of the CPRs, Scovanner cites such issues as brand awareness and the corporate
Words: 571 - Pages: 3
Questions: 1. Can you rank the projects simply by inspecting the cash flows? 2. What criteria might you use to rank the projects? Which quantitative ranking methods are better? Why? 3. What is the ranking you found by using quantitative methods? Does this ranking differ from
Words: 1627 - Pages: 7
KHAIRUNNISA BT AHMAD DAMANHURI 222411 Table of Contents What is the basic nature of the problem in this case? 1 Base-case Units Assumptions 3 Cash Flow- License 5 Working Capital - Own 6 Working Capital - License 6 Incremental NPV and IRR Sensitivity to Total Units Sold 7 What do the result of the foregoing DCF analysis suggest? 8 Are there qualitative issues that we should address, but which are not reflected in the DCF analysis? 11 Question 1: What is the basic nature of the
Words: 3055 - Pages: 13
Elephant Bar Restaurant: Mezzanine Financing Oday Tillawi Professor Shelly Canterbury Finance 441-001 Spring 2016 03/29/2016 Executive Summary: Elephant Bar Restaurant is a California based company founded by Chris Nancarrow in 1979. The restaurant started as a test concept of Carrow’s Restaurants, a chain of more than 150 full-service restaurants. Elephant bar was sold to W. R. Grace in 1985, and repurchased in 1993. The company aims to differentiate itself through innovative culinary
Words: 3941 - Pages: 16
FIN 515 Week 5 Homework 10-8 Truck: (=NVP: 14%, 5100, 5100, 5100, 5100, 5100) = $17,508.71 - $17,100 = $408.71 (=IRR: -17100, 5100, 5100, 5100, 5100, 5100) = 14.99% (=MIRR: -17100, 5100, 5100, 5100, 5100, 5100, 14%, 14%) = 14.54% → Accept the decision. Pulley System: (=NPV: 14%, 7500, 7500, 7500, 7500, 7500) = $25,748.11 – $22,430 = $3,318.11 (=IRR: -22430, 7500, 7500, 7500, 7500, 7500) = 19.99% → 20% (=MIRR: -22430, 7500, 7500, 7500, 7500, 7500, 14%, 14%) = 17.19% → Accept the decision
Words: 274 - Pages: 2
Chapter 9 Problems: 9.7 Consider another uneven cash flow stream: a) What is the present (year 0) value of the cash flow stream if the opportunity cost rate is 10%? Present value = $9136.37 b) What is the future (year 5) value of the cash flow stream if the cash flows are invested in an account that pays 10% annually? Future Value: $14714.22 c) What cash flow today (year 0), in lieu of the $2,000 cash flow, would be needed to accumulate $20,000 at the end of year 5? (Assume that the cash
Words: 511 - Pages: 3
Capital Budgeting Techniques | | GLOSSARY Capital Budget: (1) The amount of money set aside for the purchase of fixed assets (e.g., equipment, buildings, etc.). Also, (2) a request for authorization to purchase new fixed assets. Mutually Exclusive Proposals: Consideration of two or more assets that perform the same function. If one is chosen for purchase, the others are automatically rejected. Profitability Index: A ratio of the present value of the benefits (PVB) to the present value
Words: 3542 - Pages: 15
be. § Department of Accountancy, City University of Hong Kong; Tel: (852) 2788 7909; Fax: (852) 2788 7002; email: accpj@cityu.edu.hk. Abstract We test how keiretsu membership affects the Fama and French (1999) required IRR on value (or cost of capital) and the IRR on cost (or return on investment), 1974-95, of all listed non-financials in Japan. Rather than computing point estimates from aggregate data, we employ non-linear cross-sectional regression analysis of individual-firm data and
Words: 19106 - Pages: 77
