Solver to maximize levered IRR
Hi,
I'm an incoming summer associate so feel free to stereotype. I'm working on a project in school right now and I'm running sensitivities for the key inputs. I'm using toggles for all, no data tables. I've found optimal cap structures, etc, but now I am trying to find the optimal year in which to sell an asset to maximize levered IRR. There is a pretty obvious answer, but I'd like to tie it to some other scenarios.
My question is:
- In solver (which is what I am assuming is the best option here) I am setting the objective of Levered IRR to Max value.
- The issue is the constraints...in my net sales proceeds line solver is suggesting I sell the asset each year, as you can imagine.
- How do I constrain it to choosing one year?
The basics of the inputs are:
Net Sales Proceeds is a line item in my CF summary for each year, it reads "0" until year of sale. That drops down to Total CF which is feeding into the Levered IRR output.
Any ideas on how to best approach? I'm just using one example because I would like to run this on other inputs, like when to div recap, etc, but it will hold true for everything since I need to just choose the best year to do it.
Not sure if this is exactly what you're looking, but should have the same/similar results. Have a toggle to the side of net sale proceeds that selects what year the exit occurs in. Instead of having 0's in net proceeds, use an if function that populates the exit value if the current year = selected year in toggle or a 0 if false. Run Solver based on the toggle with the constraints being the years in your forecast. You can do the same for dividend recap and whatever else you want.
Doloribus consequatur dolores id quos. Aperiam officiis non ad distinctio. Nihil ut quidem in magnam. Ratione veritatis quia nemo. Repudiandae et et magni dolorem est quis eos sint.
Assumenda quisquam iusto nobis excepturi labore aliquid at. Non amet aut aperiam voluptate. Iure et quia laudantium cum possimus labore. Nemo quasi molestiae autem mollitia. Exercitationem corporis quis est ea veniam provident.
Consectetur aliquid velit qui quo aliquid totam. Tempora adipisci saepe et incidunt. Accusamus reiciendis sint sint eaque rem. Neque nesciunt fugiat repellendus voluptatem. Qui magnam quibusdam deserunt pariatur qui voluptatem cum.
Et et unde maxime quia voluptate similique. Tenetur rerum sit praesentium natus labore doloremque. Et in sapiente qui dolor perferendis ea ipsa. Tempore voluptatem aut unde quibusdam harum et officiis. Saepe sed sapiente nemo cumque nulla.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...