When One Investor Receives Cash Flow to Achieve a Certain

question 18

Multiple Choice

When one investor receives cash flow to achieve a certain IRR before splitting remaining cash flow it is referred to as?

• A) IRR Lookback.
• B) IRR Preference.
• C) Preferred IRR.
• D) Adjusted IRR.

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Definitions:

Gross Margin

The difference between sales revenue and the cost of goods sold, expressed as a percentage of sales revenue.

Sales

The activities involved in selling products or services in return for money or other compensation.

Residual Income

The amount of income that an entity has after all personal debts and expenses have been paid, often used in personal finance, or an approach to measure a department's or investment's profitability after charging cost of capital.

Invested Capital

The cumulative sum of funds invested by stockholders and creditors into a firm for long-term purposes.