咨询公司面试常用分析模型.docVIP

Advanced concepts frameworks MBAs and other candidates with business backgrounds, take note - interviewers will expect you to have a more detailed take on your case than an undergraduate would have. Here are some commonly used case concepts. Net present value Perhaps the most important type of decision company managers must make on a daily basis is whether to undertake a proposed investment. For example, should the company buy a certain piece of equipment? Build a particular factory? Invest in a new project? These types of decisions are called capital budgeting decisions. The consultant makes such decisions by calculating the net present value of each proposed investment and making only those investments that have positive net present values. Example: Hernandez is the CFO of Western Manufacturing Corp., an automobile manufacturer. The company is considering opening a new factory in Ohio that will require an initial investment of $1 million. The company forecasts that the factory will generate after-tax cash flows of $100,000 in Year 1, $200,000 in Year 2, $400,000 in Year 3, and $400,000 in Year 4. At the end of Year 4, the company would then sell the factory for $200,000. The company uses a discount rate of 12 percent. Hernandez must determine whether the company should go ahead and build the factory. To make this decision, Hernandez must calculate the net present value of the investment. The cash flows associated with the factory are as follows: Hernandez then calculates the NPV of the factory as follows: Since the factory has a negative net present value, Hernandez correctly decides that the factory should not be built. The net present value rule Note from the example above that once the consultant has figured out the NPV of a proposed investment, she then decides whether to undertake the investment by applying the net present value rule: Make only those investments that have a positive net present value. As long as the consultant follows this rule, sh