medium · Private Credit & Debt portfolio-management-monitoring-workouts
A private capital manager identifies $20M in tax savings from the step-up in basis of a portfolio company's assets.
If these savings are realized as a $1M annual tax reduction over 20 years and the fund's discount rate is 10%, what is the approximate net present value (NPV) this adds to the sponsor's return at entry?
- $12.3M
- $8.5M
- $20.0M
- $5.0M
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