Eurazeo Flashcards
1
Q
IRR
A
IRR (Internal Rate of Return) is the annualized rate of return that makes the net present value (NPV) of all future cash flows from an investment equal to zero. In simpler terms, it is the percentage return an investment is expected to generate each year, taking into account the timing and amount of cash flows.
2
Q
MOM
A
MOM is the total return on an investment as a multiple of the original investment. If you invest $1 million and it grows to $3 million, your MOM is 3x.
3
Q
Free cash flow to the firm
A
FCFF represents the cash available to all investors—both debt and equity holders—after accounting for expenses, taxes, and reinvestment needs. It reflects the true amount of cash a firm can generate from its operations.
