Expert case by Antonello

Caribbean Island – MBB Final Round

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Style:
Candidate-led (usual style)
Topics:
Brain teaser , Market sizing , Profitability analysis , Valuation
Rating:
4.6 (300+ ratings)
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Problem Definition

A wealthy client has recently bought an island in the Caribbean. She has engaged us to identify possible uses for her new island.

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Question on the case: Caribbean Island – MBB Final Round

NPV Calculation

Caribbean Island – MBB Final Round
Most recent answer on Feb 16, 2021
The best answer (on Feb 16, 2021) is from:
Ian
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Content Creator
BCG | 100% personal interview success rate (8/8) and 95% candidate success rate | Personalized interview prep
Ian
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Content Creator
 gave the best answer on Feb 16, 2021
BCG | 100% personal interview success rate (8/8) and 95% candidate success rate | Personalized interview prep
A few key tips: You should use NPV when: They say we should calculate out into perpituity (i.e. forever) They provide you with a discount rate, cost of equity/capital, etc. There is a set growth rate (into per ... (read entire answer)
3
Answers
438
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24
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on Feb 16, 2021
Last Activity
Question on the case: Caribbean Island – MBB Final Round

Shouldn't the Island acquisition cost be disregarded considering that it was already incurred?

Caribbean Island – MBB Final Round
Most recent answer on Feb 22, 2021
The best answer (on Feb 21, 2021) is from:
Ian
Expert
Content Creator
BCG | 100% personal interview success rate (8/8) and 95% candidate success rate | Personalized interview prep
Ian
Expert
Content Creator
 gave the best answer on Feb 21, 2021
BCG | 100% personal interview success rate (8/8) and 95% candidate success rate | Personalized interview prep
Hi Vasco, Based on your prior question on another case, you seem to be "obsessed" with sunk cost. I'd advise you to get off this thinking. You're recruiting for a consulting role, not an economics/research assistant ... (read entire answer)
3
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333
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41
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on Feb 22, 2021
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Question on the case: Caribbean Island – MBB Final Round

Why is NPV calculated as profit/discount rate

Caribbean Island – MBB Final Round
Most recent answer on Apr 04, 2021
The best answer (18 hours ago) is from:
Francesco
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Francesco
Expert
Content Creator
 gave the best answer 18 hours ago
#1 Expert for Coaching Sessions (3.600+) | 1.300+ Reviews with 100% Recommendation Rate | Ex BCG | 8+ Years of 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 Usua ... (read entire answer)
Show all questions on this case (4)
6
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332
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32
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on Apr 04, 2021
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