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Accounting vs. NPV Break-Even - Which is better?

break-even analysis NPV payback

Neueste Antwort am 11. Nov. 2023

Clara

Experte

McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Clara

Experte

gab die beste Antwort am 11. Nov. 2023

McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello! Precisely for the high amount of questions (1) asked by my coachees and students and (2) present in this Q&A, I created the “Math & Formulas - Economic and Financial concepts for MBB interviews”, recently ... (ganze Antwort lesen)

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12
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am 11. Nov. 2023 am 11. Nov. 2023
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NPV - ROI : can someone help me in understanding the difference in usage?

Investment NPV ROI calculation

Neueste Antwort am 1. Sept. 2023

Anonym gab die beste Antwort am 9. Nov. 2018

OK, an answer on this could fill a book, but I'll do my best. NPV means, as you surely know, the Net Present Value of a series of Cash Flows (from an investment for example). That means that all cash flows resulti ... (ganze Antwort lesen)

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am 1. Sept. 2023 am 1. Sept. 2023
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Net present value calculation for both perpetuity and for fix period

NPV

Neueste Antwort am 27. Juli 2023

Anonym gab die beste Antwort am 8. Nov. 2018

Hey there, If you don't have an MBA, the likelihood of having to use the formula in an interview (at least for MBB) is close to zero. If you did, you'd probably just to have to discount a couple cash flows in the futu ... (ganze Antwort lesen)

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am 27. Juli 2023 am 27. Juli 2023
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Replacement Analysis

NPV Replacement concept

Neueste Antwort am 27. Juni 2023

gab die beste Antwort am 23. Juni 2023

Wow! This requires a full excel sheet setup. Speaking honestly, I would do this for a paid candidate but not a free Q&A….this is quite an extensive problem! That said, your setup looks to be correct. The most import ... (ganze Antwort lesen)

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am 27. Juni 2023 am 27. Juni 2023
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NPV /WAAC ?

Bain & Company BCG Case Interview Case Maths Math problem MBB McKinsey & Company NPV

Frage bearbeitet am 26. Juli 2021

Francesco

Experte

#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success (➡ interviewoffers.com) | Ex BCG | 10Y+ Coaching

Francesco

Experte

gab die beste Antwort am 22. Juli 2021

#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success (➡ interviewoffers.com) | Ex BCG | 10Y+ Coaching

Hi there, Several questions ;) Let me go one by one. 1) NPV The correct NPV formula closer to what you reported is: NPV = -Initial Investment + (FCF/Discount Rate) Where FCF= Free cash flow of the project g ... (ganze Antwort lesen)

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am 26. Juli 2021 am 26. Juli 2021
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Probability calculation in NPV

NPV

Neueste Antwort am 23. Juli 2021

Francesco

Experte

#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success (➡ interviewoffers.com) | Ex BCG | 10Y+ Coaching

Francesco

Experte

gab die beste Antwort am 23. Juli 2021

#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success (➡ interviewoffers.com) | Ex BCG | 10Y+ Coaching

Hi there, I guess you mean that the expected operating profit, not the NPV, is $45M (without considering the upfront cost). If they are applying the 50% just to the operating profits, it means that the upfront cost ... (ganze Antwort lesen)

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am 23. Juli 2021 am 23. Juli 2021
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What’s the meaning of discount rate ‘r’ in NPV?

Corporate Finance Finance MBB NPV

Neueste Antwort am 30. Apr. 2020

Sidi

Experte

McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 350+ candidates secure MBB offers

Sidi

Experte

gab die beste Antwort am 9. Apr. 2020

McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 350+ candidates secure MBB offers

Hi! simple answer: the discount rate r corresponds to the cost of capital. For equity, the cost of capital corresponds to the opportunity cost of not investing it. This opportunity is the rate of return of riskles ... (ganze Antwort lesen)

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am 30. Apr. 2020 am 30. Apr. 2020
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NPV of a Perpetuity --> How to improve?

Corporate Finance NPV Valuation

Neueste Antwort am 30. Apr. 2020

Luca

Experte

BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Luca

Experte

gab die beste Antwort am 11. Apr. 2020

BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Hello Dee, Your answer sounds good, you have basically cover all the possibilities. Just remember that there are several ways to increase your yearly cash flow, not only findind new sources of revenues. More over, a g ... (ganze Antwort lesen)

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am 30. Apr. 2020 am 30. Apr. 2020
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Investment Comparison with different up-front costs (NPV-based)

Cases Finance Investment NPV profitability

Neueste Antwort am 11. Apr. 2020

Luca

Experte

BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Luca

Experte

gab die beste Antwort am 11. Apr. 2020

BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Hello, This is a very interesting question. Before taking a decision it's fundamental to ask interviewer some questions: What is the target of our client? It's more interested in an higher NPV or ROI? As you know, ... (ganze Antwort lesen)

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am 11. Apr. 2020 am 11. Apr. 2020
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Mini Case: Calculate your own NPV

minicase NPV

Neueste Antwort am 27. März 2020

Francesco

Experte

#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success (➡ interviewoffers.com) | Ex BCG | 10Y+ Coaching

Francesco

Experte

gab die beste Antwort am 27. März 2020

#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success (➡ interviewoffers.com) | Ex BCG | 10Y+ Coaching

Hi there, I reported my comments below: you can use a DCF model as for several years it approximates well the real flow of money (which would end somewhere between age 80 and 110). the discount rate represents t ... (ganze Antwort lesen)

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am 27. März 2020 am 27. März 2020
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Calculation for NPV / VAN

NPV

Frage bearbeitet am 24. Aug. 2019

Francesco

Experte

#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success (➡ interviewoffers.com) | Ex BCG | 10Y+ Coaching

Francesco

Experte

gab die beste Antwort am 24. Aug. 2019

#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success (➡ interviewoffers.com) | Ex BCG | 10Y+ Coaching

Hi Anonymous, the link you posted seems not working, could you please post the full question? We can then provide an answer to it. Best, Francesco --- EDIT The new link works, thanks. The solution is quite ... (ganze Antwort lesen)

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am 24. Aug. 2019 am 24. Aug. 2019
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How to use DCF, NPV and ROI

DCF NPV ROI calculation

Letzte Aktivität am 27. Juni 2017

Olu

Looking for solid partners (10+Cases) . Currently preparing for MBB,Tier II & Big 4- Given and Done 15+ cases

Olu gab die beste Antwort am 27. Juni 2017

Looking for solid partners (10+Cases) . Currently preparing for MBB,Tier II & Big 4- Given and Done 15+ cases

NPV= Net Present Value- [-investment +( Summation of FCF/(1+wacc)^t from 1 to t)].This is a basic formula, it is way more involved than the substituting numbers in the formula, typical you would need to create a DCF mo ... (ganze Antwort lesen)

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am 27. Juni 2017 am 27. Juni 2017
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Case: Net Present Value Calculations

Case Calculations Discounted Cash-Flow Net Present Value NPV

Letzte Aktivität am 30. Jan. 2017

Francesco

Experte

#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success (➡ interviewoffers.com) | Ex BCG | 10Y+ Coaching

Francesco

Experte

gab die beste Antwort am 20. Nov. 2016

#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success (➡ interviewoffers.com) | Ex BCG | 10Y+ Coaching

Hi Anonymous, To answer your questions, I will first describe the theoretical correct valuation approach, and then the simplified approach you can normally apply in consulting interviews. Full DCF Analysis From a ... (ganze Antwort lesen)

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