clawback
.xlsx
keyboard_arrow_up
School
University of Texas *
*We aren’t endorsed by this school
Course
387
Subject
Finance
Date
Apr 3, 2024
Type
xlsx
Pages
15
Uploaded by UltraFalconMaster1014
UT Fall 2022
Clawback Example
Answer
Assumptions:
Fund Size
$ 2,000,000,000 Investments
16
Size of each investment
$ 125,000,000 Carried interest
20%
Management fee
2%
Hurdle rate
0%
Distributions
From inception
Initial liquidated investments
7
Exit value of each initial exit
$ 600,000,000 Liquidation value of initial exits
$ 4,200,000,000 Distributible proceeds
$ 4,200,000,000 Invested capital in initial exits
875,000,000 Distributable proceeds
$ 3,325,000,000 Distributions
GPs
$ 665,000,000 LPs
$ 2,660,000,000 Assumptions:
Fund Size
$ 2,000,000,000 Investments
16
Size of each investment
$ 125,000,000 Carried interest
20%
Management fee
2%
Hurdle rate
0%
Distributions
From inception
Initial liquidated investments
7
Exit value of each initial exit
$ 600,000,000 Liquidation value of initial exits
$ 4,200,000,000 Additional liquidated investments
9
Exit value of each additional exit
$ 80,000,000
Liquidation value of additional exits
$ 720,000,000 Invested capital in additional exits
1,125,000,000 Distributable proceeds
-$ 405,000,000 Distributions
GPs
-$ 81,000,000 LPs
-$ 324,000,000 Clawback
-$ 81,000,000 Total liquidation value of exits
Initial exits
$ 4,200,000,000 Additional exits
720,000,000 Total
$ 4,920,000,000 Invested capital
$ 2,000,000,000 Net distributable proceeds
$ 2,920,000,000 Total Distributions Including the Initial Capital Invested
GPs
$ 584,000,000 LPs
$ 2,336,000,000
Question
Assumptions:
Fund Size
Investments
Size of each investment
Carried interest
Management fee
Hurdle rate
Distributions
Initial liquidated investments
Exit value of each initial exit
Liquidation value of initial exits
Distributible proceeds
Invested capital in initial exits
Distributable proceeds
Distributions
GPs
LPs
Assumptions:
Fund Size
Investments
Size of each investment
Carried interest
Management fee
Hurdle rate
Distributions
Initial liquidated investments
Exit value of each initial exit
Liquidation value of initial exits
Additional liquidated investments
Exit value of each additional exit
Liquidation value of additional exits
Invested capital in additional exits
Distributable proceeds
Distributions
GPs
LPs
Clawback
Total liquidation value of exits
Initial exits
Additional exits
Total
Invested capital
Net distributable proceeds
Total Distributions Including the Initia
GPs
LPs
$ 2,000,000,000 16
$ 125,000,000 20%
2%
0%
From inception
7
$ 600,000,000 $ 2,000,000,000 16
$ 125,000,000 20%
2%
0%
From inception
7
$ 600,000,000 9
$ 80,000,000
al Capital Invested
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Related Questions
GG
arrow_forward
Cash flow
End of year Amount Appropriate required return
1 0
2 0
3 0
4 to 15 0 4%
16 120000
a) Find the value of the bellow bond in order to assist ne with the investment decision
arrow_forward
Discount Rate
12%
Investment Project
Cash Flow
Total Net Cash Flow
Initial Investment
$ (8,000)
?
Year 1
$ 800
?
Year 2
$ 900
?
Year 3
$ 1,500
?
Year 4
$ 1,800
?
Year 5
$ 3,200
NPV of investment
$ ?
Estimated Payback Period
?
Estimate the total net cash flows, NPV of Investment and Estimated Payback Period using the excel's formula.
arrow_forward
Need General Accounting Question Solution
arrow_forward
Pls help stepwise sir
arrow_forward
Two investments have the following pattern of expected returns:Investment AYear 1 2 3 4 4 (sale)BTCF $5,000 $10,000 $12,000 $15,000 $120,000Investment BYear 1 2 3 4 4 (sale)BTCF $2,000 $4,000 $1,000 $5,000 $180,000Investment A requires an outlay of $110,000 and Investment B requires an outlay of $120,000.a. What is the BTIRR on each investment?b. If the BTIRR were partitioned based on BTCFo and BTCFs what proportions of the BTIRR would be represented by each?c. What do these proportions mean?
arrow_forward
Two investments have the following pattern of expected returns:
Investment A
BTCF
Year 1
$6,000
Year 2
$11,000
Year 3
$13,000
Year 4
$16,000
Year 4
(Sale)
$130,000
Investment B
Year 4
BTCF
Year 1
$3,000
Year 2
$5,000
Year 3
$2,000
Year 4
$6,000
(Sale)
$190,000
Investment A requires an outlay of $120,000 and Investment B requires an outlay of $130,000.
Required:
a. What is the BTIRR on each investment?
b. If the BTIRR were partitioned based on BTCF, and BTCFS' what proportions of the BTIRR would be represented by each?
c. Which investment would be preferable?
Complete this question by entering your answers in the tabs below.
Required A Required B Required C
What is the BTIRR on each investment? (Round your answers to 2 decimal places.)
BTIRR
Investment A
%
Investment B
%
arrow_forward
Year Cash Flow (A) Cash Flow (D)
$-
-$
0
348,000
51,000
1234
47,000
24,200
2
67,000
22,200
67,000
19,700
14,800
442,000
Whichever project you choose, if any, you require a return of 14 percent on your
investment.
a-1.What is the payback period for each project? (Do not round intermediate
calculations and round your answers to 2 decimal places, e.g., 32.16.)
Project A
Project B
Payback period
years
years
a-
2.
If you apply the payback criterion, which investment will you choose?
O Project A
O Project B
b- What is the discounted payback period for each project? (Do not round intermediate
1. calculations and round your answers to 2 decimal places, e.g., 32.16.)
arrow_forward
12q-19
arrow_forward
Basic Present Value Concepts
Annual cash inflows that will arise from two competing investment projects are given below:
The discount rate is 18%.
Required:
Compute the present value of the cash inflows for each investment.
arrow_forward
Annual cash inflows that will arise from two competing investment projects are given below:
Investment A
$ 3,000
4,000
5,000
6,000
$ 18,000
Year
1
2
3
4
The discount rate is 10%
Click here to view Exhibit 148 1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables
Required:
Compute the present value of the cash inflows for each investment
Year
1234
S
S
Investment B
$6,000
5,000
4,000
3,000
$18,000
Present Value of Cash Flows
Investment A
300
300 $
Investment B
arrow_forward
Problem 2
ABM Enterprise would like to evaluate/analyze an investment proposal.
Given the following:
Investment amount 450,000 (2022)
Dividends / Revenue stream - 100,000 for the first year and an interval of 5,000 for the
succeeding years
Discount rate - 14%
a. NPV for the perio 2023 through 2029;
b. Total NPV using manual computation;
c. Total NPV using the Excel function; and
d. IRR rate.
arrow_forward
Year
Cash Flow (A)
Cash Flow (B)
0
-$ 427,000
-$ 41,000
1
43,000
20,600
2
63,000
13,100
3
80,000
19,600
4
542,000
16,400
The required return on these investments is 13 percent.
a. What is the payback period for each project?
Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.
b. What is the NPV for each project?
Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.
c. What is the IRR for each project?
Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.
d. What is the profitability index for each project?
Note: Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.
e. Based on your answers in (a) through (d), which project will you finally choose? (Note: if conclusions with evaluation methods
disagree, choose project with highest NPV.)
a. Project A
Project B
b. Project A
Project…
arrow_forward
Porter Company is analyzing two potential investments
Initial investment
Net cash flow:
Year 1
Year 2
Year 3
Year 4
Project X Project Y
$ 75,900
$ 64,000
26,000
26,000
26,000
4,400
28,000
28,000
20,000
If the company is using the payback period method, and it requires a payback of three years or less, which project(s) should be selected?
0
arrow_forward
Assume a $50,000 investment and the following cash flowa for two aleternatives..
Year Investment A Investment B
1 $10,000 $20,000
2 $11,000 $25,000
3 $13,000 $15,000
4 $16,000
5 $30,000
Which alternative would you select under the payback method?
6
arrow_forward
Financial Accounting Question please solve
arrow_forward
Answer in Excel, Attached it question.
arrow_forward
Vaughn Company has the following information about a potential capital investment:
Initial investment $ 280,000
Annual cash inflow
$ 74,000
6 years
13%
Expected life:
Cost of capital
1. Calculate the net present value of this project. (Future Value of $1. Present Value of $1. Euture Value Annuity of $1. Present Value
Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar.)
Net Present Value
arrow_forward
Annual cash inflows from two competing investment projects are given below:
Investment A
$ 4,000
5,000
6,000
7,000
$ 22,000
Year
1234
The discount rate is 10%.
Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables.
Required:
Compute the present value of the cash inflows for each investment.
Year
1
2
3
4
$
Investment B
$ 7,000
6,000
5,000
4,000
$ 22,000
Present Value of Cash Flows
Investment A
0
$
Investment B
0
M
...
arrow_forward
Consider the following investment projects.Year (n) Net Cash FlowProject 1 Project 20 -$1,200 -$2,0001 600 1,5002 1,000 1,000IRR 19.65% 17.54%Determine the range of MARR where project 2 would be preferred over project 1.(a) MARR … 12.5%(b) 13% … MARR … 15%(c) 16% … MARR(d) Not enough information to determine
arrow_forward
Help
arrow_forward
The following table contains information about four potential investment projects that
Castle Corporation is considering.
Required
Investment
$640,000
Payback
Project
A
Project Life
ARR
Period
5
19.50%
3.9
B
$ 890,000
4
17.75%
3.5
с
$ 1,140,000
4
10.75%
3.2
NPV
$203,250
$193,062
$ 216,670
Profitability Index
2.88
1.22
1.35
D
$ 1,640,000
5
12.45%
3.8
$ 246,008
1.30
Required:
1. Rank the four projects in order of preference under each method indicated by the
headers:
2. Which method is the best for evaluating the investments?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Rank the four projects in order of preference under each method indicated by the
headers:
1st preferred
2nd preferred
3rd preferred
4th preferred
Accounting
Rate of Return
Payback
Period
Net Present
Value
Profitability
Index
arrow_forward
ss
arrow_forward
Nikul
arrow_forward
Net Present Value AnalysisAnderson Company must evaluate two capital expenditure proposals. Anderson's hurdle rate is 12%. Data for the two proposals follow.
Proposal X
Proposal Y
Required investment
$300,000
$300,000
Annual after-tax cash inflows
60,000
After-tax cash inflows at the end of years 3, 6, 9, and 12
180,000
Life of project
12 years
12 years
Using net present value analysis, which proposal is the more attractive?Do not use negative signs with your answers. Round PV answers to the nearest whole number. Use rounded answers for subsequent calculation of net present value.
Proposal X
Proposal Y
Net present value
Initial outflows
Answer
Answer
PV of future cash flows
Answer
Answer
Net present value
Answer
Answer
arrow_forward
SEE MORE QUESTIONS
Recommended textbooks for you
Fundamentals Of Financial Management, Concise Edi...
Finance
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Related Questions
- GGarrow_forwardCash flow End of year Amount Appropriate required return 1 0 2 0 3 0 4 to 15 0 4% 16 120000 a) Find the value of the bellow bond in order to assist ne with the investment decisionarrow_forwardDiscount Rate 12% Investment Project Cash Flow Total Net Cash Flow Initial Investment $ (8,000) ? Year 1 $ 800 ? Year 2 $ 900 ? Year 3 $ 1,500 ? Year 4 $ 1,800 ? Year 5 $ 3,200 NPV of investment $ ? Estimated Payback Period ? Estimate the total net cash flows, NPV of Investment and Estimated Payback Period using the excel's formula.arrow_forward
- Need General Accounting Question Solutionarrow_forwardPls help stepwise sirarrow_forwardTwo investments have the following pattern of expected returns:Investment AYear 1 2 3 4 4 (sale)BTCF $5,000 $10,000 $12,000 $15,000 $120,000Investment BYear 1 2 3 4 4 (sale)BTCF $2,000 $4,000 $1,000 $5,000 $180,000Investment A requires an outlay of $110,000 and Investment B requires an outlay of $120,000.a. What is the BTIRR on each investment?b. If the BTIRR were partitioned based on BTCFo and BTCFs what proportions of the BTIRR would be represented by each?c. What do these proportions mean?arrow_forward
- Two investments have the following pattern of expected returns: Investment A BTCF Year 1 $6,000 Year 2 $11,000 Year 3 $13,000 Year 4 $16,000 Year 4 (Sale) $130,000 Investment B Year 4 BTCF Year 1 $3,000 Year 2 $5,000 Year 3 $2,000 Year 4 $6,000 (Sale) $190,000 Investment A requires an outlay of $120,000 and Investment B requires an outlay of $130,000. Required: a. What is the BTIRR on each investment? b. If the BTIRR were partitioned based on BTCF, and BTCFS' what proportions of the BTIRR would be represented by each? c. Which investment would be preferable? Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the BTIRR on each investment? (Round your answers to 2 decimal places.) BTIRR Investment A % Investment B %arrow_forwardYear Cash Flow (A) Cash Flow (D) $- -$ 0 348,000 51,000 1234 47,000 24,200 2 67,000 22,200 67,000 19,700 14,800 442,000 Whichever project you choose, if any, you require a return of 14 percent on your investment. a-1.What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project A Project B Payback period years years a- 2. If you apply the payback criterion, which investment will you choose? O Project A O Project B b- What is the discounted payback period for each project? (Do not round intermediate 1. calculations and round your answers to 2 decimal places, e.g., 32.16.)arrow_forward12q-19arrow_forward
- Basic Present Value Concepts Annual cash inflows that will arise from two competing investment projects are given below: The discount rate is 18%. Required: Compute the present value of the cash inflows for each investment.arrow_forwardAnnual cash inflows that will arise from two competing investment projects are given below: Investment A $ 3,000 4,000 5,000 6,000 $ 18,000 Year 1 2 3 4 The discount rate is 10% Click here to view Exhibit 148 1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables Required: Compute the present value of the cash inflows for each investment Year 1234 S S Investment B $6,000 5,000 4,000 3,000 $18,000 Present Value of Cash Flows Investment A 300 300 $ Investment Barrow_forwardProblem 2 ABM Enterprise would like to evaluate/analyze an investment proposal. Given the following: Investment amount 450,000 (2022) Dividends / Revenue stream - 100,000 for the first year and an interval of 5,000 for the succeeding years Discount rate - 14% a. NPV for the perio 2023 through 2029; b. Total NPV using manual computation; c. Total NPV using the Excel function; and d. IRR rate.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Fundamentals Of Financial Management, Concise Edi...FinanceISBN:9781337902571Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Fundamentals Of Financial Management, Concise Edi...
Finance
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning