Show the answers on an Excel Spreadsheet, otherwise it will be zero.

It has to be well organized and clear.

$1/$ Calculation of IRR

Assume that a group of sponsors buys a firm for $$4$ billion.

Itt is financed with $70\%$ debt and $30\%$ equity.

The firm was able to generate $$200,000$ million a year after interest to pay back the debt.

The sponsor sells the firm in year $5$ for $$5\mathrm{.}5$ billion.

What is the IRR of this LBO?

$2/$ Main Sponsor

Among the sponsors, there is a main sponsor who will turn the acquired firm around.

This main sponsor invested only $10\%$ of the amount invested in equity but gets $30\%$ of the amount of equity at the end.

a$/$ What is the IRR for the main sponsor?

b$/$ What is the IRR for the group of other sponsors?