Goal Seek, Looking for some help with modeling
Hey all, getting ready for technical interviews coming out of undergrad here and I'm looking for some help with goalseek, I understand it's use but I'm struggling to understand it's role in this situation -- for example, if you were given a set of assumptions that required you to find an asset's purchase price and entry cap rate, but they only provided a levered IRR requirement to go off of, how would you go about doing this?
I've tried just assuming a purchase price to get a loan amount to find some annual debt service payments - then using these levered cash flows to goal seek a purchase price (rough example of this below), but I'm not sure if this is the right way to go about it
I would really appreciate any insight anyone might be able to provide on this
just for a little more clarity, here's what exactly was stated as a part the prompt
You can use NPV and run the IRR as the discount rate to back into a purchase price. From there getting the cap rate is pretty self-explanatory
I appreciate the quick response, although I don't totally follow -- do you have any examples in excel that you could PM? I think my confusion is on what #'s you would use to run your NPV calc. From what I understand you're saying you would use =NPV(required Lev IRR here, then some set of values here) to find the purchase price?
https://1drv.ms/x/s!AnxC75Rrk7R7gTQCjEtJj4HxbSBK
here's a link to my run through, if anyone has any time to check this over I would really appreciate any feedback
Aut aliquam suscipit similique at saepe inventore et. Dicta tenetur doloribus odio sunt. Eius perferendis esse delectus vero deserunt ut. Impedit illo est fugit nobis eaque.
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...