Investment decisions and returns - Nominal XIRR to be used??
Hello,
I am getting confused on the correct IRR to be used for determining the lease revenues to be charged on a lease investment with monthly cashflows: Let's imagine I have an investment the first month followed by lease revenues for several months. And that I want a return of 20%, should I use nominal XIRR or XIRR alone as a trigger to determine the fixed lease revenues of this project? Below my understanding, please correct me. Nominal XIRR will give the rate of return that the lessor really makes. XIRR alone is an annual effective and so it is not what the lessor will in fact make...It should be used when comparing alternative investments but is that good to be used for comparison in this type of lease case?
Thank you
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