I'm too old and haven't thought about this stuff in a while, so...
If I create a really long schedule of a cash flows, where cash flows grow 2% a year, I get an IRR of 11.3%.
If I take the first five years of the same schedule, then calculate a perpetuity off that (2% perp growth rate, 10% discount rate), I get an IRR of 15.9%
I was expecting the IRR to be the same, since I was just replacing a really long schedule of cash flows with a terminal value that is supposed to represent the same.
What am I missing?
This post has so many things wrong with it
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