What annual return on investment (ROI) can I expect to receive, whats the payback period, what is
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What annual return on investment (ROI) can I expect to receive, what’s the payback period, what is the net present value (NPV) of the deal, what is my projected internal rate of return (IRR), and how much is the sponsor group making on the deal?
■ ROI, payback period, NPV, and IRR were discussed in chapters 7, 8, and 9.
■ As long as your owner or prospective equity investor is confident she will achieve her targeted goals and hurdle rates for ROI and IRR, she will usually be okay with the sponsor group earning a nice bit of change as well.
■ The key, as we discussed earlier, is for the cash equity investors to receive their return before the sponsor group reaps significant rewards from the deal.
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