Consulting Q&A – Ask Questions about Your Career

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How to calculate NPV for a cost reduction

math profitability cost reduction

Most recent answer on Jun 13, 2022

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

gave the best answer on Jun 13, 2022

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

Hi there, The value generated by an asset in perpetuity can be calculated with the perpetuity formula as follows: V=FCF/(r-g) Where V = Value of the asset FCF = Free cash flow r= Discount rate g= Growth rate of FCF The ... (read entire answer)

1.5 k
Views

32
Total Upvotes

on Jun 13, 2022 on Jun 13, 2022
Last Activity

Cost Reduction - Structure

approaching a case Cost reduction cost structure cost-benefit analysis MBB Cost Structure profitability cost reduction Structure

Most recent answer on Jan 15, 2021

#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

gave the best answer on Jan 15, 2021

#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Hi Ish, In general, for determining cost issues, you need to break down the problem into a tree/root-cause analysis and ask the highest level (but specific) questions first! In this way, you essentially move down the ... (read entire answer)

1.9 k
Views

44
Total Upvotes

on Jan 15, 2021 on Jan 15, 2021
Last Activity

In Profitability cases, when analyzing the cost side, how to decide the cost structure breakup?

cost structure Profitability Case Cost Structure profitability cost reduction

Most recent answer on Oct 02, 2019

McKinsey / ex-Interviewer at McKinsey / I will coach you to rock those interviews

gave the best answer on Oct 02, 2019

McKinsey / ex-Interviewer at McKinsey / I will coach you to rock those interviews

In my experience as an interviewer most of the time it doesn’t matter how you will divide the costs. What matters is breadth and depth of how you approach the problem. What do I mean by that? Let’s take an example of ... (read entire answer)

2.6 k
Views

14
Total Upvotes

on Oct 02, 2019 on Oct 02, 2019
Last Activity

Basic Cost Frameworks?

Cost reduction cost-benefit analysis fixed costs profitability cost reduction variable costs

Recent activity on Mar 08, 2018

McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

gave the best answer on Mar 08, 2018

McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi, As a candidate, I've struggled a lot with cost reduction cases since most of the case books don't have them, while you can face these cases on the case interviews. This is especially relevant for McKinsey intervie ... (read entire answer)

4.8 k
Views

11
Total Upvotes

on Mar 08, 2018 on Mar 08, 2018
Last Activity

Shuting down a profitable business to reduce costs

profitability cost reduction

Recent activity on Sep 27, 2017

Odeh gave the best answer on Sep 27, 2017

Hi, I agree with Anonymous. Costs are not profits but contribute to them. Thus your answer must elaborate on the the difference of profits realised if the product persists or is terminated. Reasons to shut down a ... (read entire answer)

3.4 k
Views

6
Total Upvotes

on Sep 27, 2017 on Sep 27, 2017
Last Activity

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