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Intermediate

A fund invests $5 million in a company and receives $20 million at exit eight years later. Roughly what are the MOIC and IRR?

  1. A. 4.0x MOIC and roughly 50% IRR
  2. B. 3.0x MOIC and roughly 25% IRR
  3. C. 4.0x MOIC and roughly 41% IRR
  4. D. 4.0x MOIC and roughly 19% IRRCorrect

Takeaway. A multiple is silent about time, so annualize before you judge it: the same 4x is a strong result over four years and an ordinary one over eight.

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