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- Committed capital as carry basis.
- Investment capital as carry basis
- Higher GVM
LPs (Limited Partners) typically prefer committed capital as carry basis. Carry, or carried interest, is a share of profits paid to the general partner (GP) of a private equity fund. It represents the share of profits that exceed the hurdle rate, which is the minimum rate of return that the fund needs to earn before the GP is entitled to carry.
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- a. With the use of an example, briefly explain the main difference between the ex-ante and the ex-post opportunity cost of capital. Why does this matter for the evaluation of an investment decision?Determining optimum capital structure is a. An investment decision b. A financing decision c. A dividend decision d. liquidity decisionExplain the term Return on Invested Capital?
- Explain briefly what the terms working capital and working capital management imply. Explain the link between current asset policy and liquidity, profit, and risk as well as any other considerations. Which policy do you believe is the best?Which of the following are present value methods of analyzing capital investment proposals? a. internal rate of return and average rate of return b. average rate of return and net present value c. net present value and cash payback d. net present value and internal rate of return