How would a bank loan affect the economics of the cellar?

Oliver Wyman case: Setting up a Wine Cellar
Neue Antwort am 4. Feb. 2020
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Julia
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fragte am 26. Jan. 2020
Over 30 cases with >15 coaching sessions for MBB | Focus on Consumer Goods for me please

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Ian
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antwortete am 4. Feb. 2020
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

This doesn't matter! This isn't in the prompt/question.

The interviewer, clearly a Partner (joke), has the $ to build the cellar.

Regardless, the rate at which he/she could obtain the loan is technically the same rate at which he/she could loan out their money.

Therefore, in both situations, your hurdle rate is the opportunity cost (if asked, which it wasn't). Of course, you could probably recommend "Yes, you can do this, but it'd be better to invest it and use THOSE returns to fund your wine"

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Ian

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