If the investment is purchased for $25,000 and will pay $5,000 per you in a perpetuity and the required rate or return is 15%, what is the money-weighted return?
I know how to do the formula, 5,000/25,000=20%
but, how do i do it on my BA2 Plus? I hit CF, then type in 25,000, +/- button, enter button, down button, type 5,000, enter button, then what do i do from here? Thanks for any help you guys can give.作者: ajpheif16 时间: 2011-7-13 13:34
Use the cash flow function, enter the payment, and then enter 999 periods. It's not technically a perpetuity, but the rounding is too small for it to matter.作者: Maddin 时间: 2011-7-13 13:34
Rather than just lear the "trick", here's the intuition behind the problem:
The IRR is the discount rate that results in an NPV of zero. So, since the cash inflows are a perpetuity,
NPV = -25,000 + 5,000/i
set NPV to zero and solve for i: 0 = 5.000/- - 25,000 ==> i=0.20作者: pacmandefense 时间: 2011-7-13 13:34
