OFRE S27: Equity Multiple vs. Internal Rate of Return
Old Fashioned Real Estate Show
English - April 19, 2020 21:38 - 13 minutes - 24.6 MB - ★★★★★ - 19 ratingsInvesting Business Entrepreneurship investing realestate Homepage Download Apple Podcasts Google Podcasts Overcast Castro Pocket Casts RSS feed
In this episode we cover the difference between two often misunderstood common terms. Equity Multiple Ratio used to determine total cash return over the life of the investment (Total Profit + Equity Invested) / Equity Invested Internal Rate of Return Discount rate such that the Net Present Value of All cash flows equals zero Need to use excel (google it and watch it on YouTube) What it means in English is it is a measure of expected returns annualized over time. Think of this as the rate of growth you would expect over time from a project How much interest would a bank account have to pay given you cash flows to produce same overall return? How they are different. Equity multiple shows total return of cash over time. IRR shows total return on cash over time