When one investor receives cash flow to achieve a certain IRR before splitting the remaining cash flow it is referred to as:

Question

Quizplus · Accepted Answer

This is known as an IRR preference, which means that one investor is entitled to a certain rate of return (IRR) before the remaining cash flow is split between multiple investors. This can be used as a way to compensate investors who are taking on more risk or investing more capital upfront. Option A (IRR lookback) is not a commonly used term in the industry. Option C (Preferred IRR) is similar to IRR preference, but not as commonly used. Option D (Adjusted IRR) can refer to a variety of calculations and adjustments made to the IRR, but does not specifically refer to the scenario described in the question.

When One Investor Receives Cash Flow to Achieve a Certain