Re: help on circular reference and MINIMUM value to be found
- From: l <lcnewsNOSPAM@xxxxxxxx>
- Date: Sun, 19 Aug 2007 13:08:17 -0400
On Sun, 19 Aug 2007 06:52:01 -0400, "Zone" <KingOfWhiles@xxxxxxx>
wrote:
It is rather confusing, but an interesting problem. I'm not sure how you'reThanks.
going about this, but it seems it would be easier to figure using the total
distribution compared to Player 2's distribution and that should avoid the
circular reference. James
I dont think you can get rid of the circularity, it's there "by
definition"...
If the "catch-up" were at full speed, I wouldnt have any problem.
It would be the value: ("preferred return"/(80))*20 = "preferred
return"/4
BUT the fact that the catch-up is at 80% speed (that means that also
Player 1 gets part of the money incoming after the Preferred return)
makes it circular.
There are a lot of value that satisfy the 80/20 split requirement. I
don't know how to find the minimum value.
Let's take as example an INITIAL cash flow of 113,333
Out of this, Player 1 gets his preferred return = 10,000
that leaves a residual cash flow of 3,333
this could be split 667 and 2,666 among the two players. Now the
requirement 80/20 is satisfied. This is the minimum amount required to
satisfy it.
BUT if I increase the initial cash flow (let's bring it to 200,000),
in my model also the distribution to the two players changes, and the
80/20 split is satisfied. While I am looking for the minimum amount
that satisfies the requirement, not at whatever split.
thanks
"l" <lcnewsNOSPAM@xxxxxxxx> wrote in message.
news:dd9fc3tjltabiulu9vdbhg04kgu2tjgh3t@xxxxxxxxxx
Hi all
i have this proble,
the formula has to be circular, i cant think how to avoid.
Is a financial distribution model called catch-up.
Imagine 2 players.
The first money goes ONLY to player 1.
After he reached a threshold called "preferred return"
all the next incoming money is distributed 80% to Player 2 and 20% to
Player 1, UNTIL player 2 (TWO!!!) gets a TOTAL CUMULATIVE
distribution that is 20% of the total money distributed to the 2
players.
My problem is that i can't figure out the MINIMUM value that satisfies
this condition; because i built the model, but all the value above the
threshold do satisfy the requirement of the split 80/20
I figured out in this way:
When the new money is low, so that i am sure i didn't hit the
threshold, then you can split the new money 80% and 20%.
Otherwise: circular reference, because the money of player 2 is also
function of the money of player 1, which is function of player 2's
money.
I did this with a MIN function, (or a MAX, depending on the sign) For
example for player 2 could be:
MIN(cashflow*80%, ((oldmoneyPlayer1+newmoneyPlayer1)/(80%))*20%)
thanks in advance
hope it's not too confused
I am looking for the value of new money such that these two banal
formulas are equal. I imagine the Solver should be able to do it, but
i couldnt figure out.
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