Interviewer view · keep this screen to yourself

Two projects, two different winners

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

A fictional manufacturer in Poland can do only one of two projects (EUR millions). Project A costs 100 today and returns 60 in year 1 and 72 in year 2. Project B costs 1,000 today and returns 1,150 in year 1. Its cost of capital is 10 percent. Which should it choose?

2. Answers to clarifying questions

This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.

3. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

Choose the project that adds the most value today (this comes from the question: only one can be done)
- NPV of each at 10 percent
- IRR of each
- Payback of A, as a check on risk

4. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: NPV of A
What a strong candidate does: 60 divided by 1.1, plus 72 divided by 1.21, minus 100.
NPV of A (EUR millions): 60 ÷ 1.1 + 72 ÷ 1.21 - 100 = 14.05
Step 2: IRR of A
What a strong candidate does: At 20 percent, 60 divided by 1.2 is 50 and 72 divided by 1.44 is 50, so the NPV is zero. The IRR is 20 percent.
NPV of A at 20 percent (EUR millions): 60 ÷ 1.2 + 72 ÷ 1.44 - 100 = 0
Step 3: Payback of A
What a strong candidate does: 60 comes back in year 1; the other 40 takes 40 out of 72 of year 2.
Payback of A (years): 1 + (100 - 60) ÷ 72 = 1.56
Step 4: NPV of B
What a strong candidate does: 1,150 divided by 1.1, minus 1,000.
NPV of B (EUR millions): 1,150 ÷ 1.1 - 1,000 = 45.45
Step 5: IRR of B
What a strong candidate does: A one-year project: the gain divided by the cost.
IRR of B (percent): (1,150 - 1,000) ÷ 1,000 × 100 = 15

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

The company should choose project B, because it adds about EUR 45 million of value today against about EUR 14 million for A. IRR points the other way (20 percent for A against 15 percent for B) because IRR ignores size: a high return on a small sum can add less value than a lower return on a large one. The risk with B is that it puts EUR 1,000 million at stake for one year. As a next step, confirm the company can fund B and that the 1,150 is as certain as A's cash flows.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.