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Return per MW for a colocation campus near Mumbai

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 developer plans a 20 MW colocation campus near Mumbai and reports in USD. It costs USD 10 million per MW of IT load to build, excluding the customers' servers. It expects to lease 90 percent of the capacity at an average rent of USD 150 per kW per month; customers pay for their own electricity on top. Operating costs that are not passed through (staff, maintenance, insurance, security) are USD 400,000 per MW of built capacity a year. What are yearly revenue and operating profit, the yield on cost, and the simple payback? (Figures are illustrative.)

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.

Return per MW = (rent from leased MW minus operating costs) / build cost
- Revenue = MW x 1,000 kW x leased share x rent per kW x 12 months
- Operating profit = revenue minus operating costs
- Yield on cost = operating profit / build cost
- Payback = build cost / operating profit, in years

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: Build cost
What a strong candidate does: 20 MW at USD 10 million each, in USD millions.
Build cost (USD millions): 20 × 10 = 200
Step 2: Yearly rent
What a strong candidate does: 20,000 kW, 90 percent leased, at USD 150 a month for 12 months, in USD millions.
Yearly revenue (USD millions): 20 × 1,000 × 0.9 × 150 × 12 ÷ 1,000,000 = 32.4
Step 3: Operating costs
What a strong candidate does: USD 0.4 million per MW on all 20 MW built.
Yearly operating costs (USD millions): 20 × 0.4 = 8
Step 4: Operating profit
What a strong candidate does: Revenue minus operating costs, before depreciation, interest and tax.
Yearly operating profit before depreciation (USD millions): 32.4 - 8 = 24.4
Step 5: Yield on cost
What a strong candidate does: Operating profit divided by build cost.
Yield on cost (percent): 24.4 ÷ 200 × 100 = 12.2
Step 6: Simple payback
What a strong candidate does: Build cost divided by yearly operating profit.
Simple payback (years): 200 ÷ 24.4 = 8.2

The recommendation to listen for

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

The campus is attractive if it can be leased quickly and the power arrives on time, because it earns a yield on cost of about 12.2 percent and pays back in about 8.2 years on a building that lasts decades. First, 90 percent leasing at USD 150 per kW per month brings USD 32.4 million a year against USD 8 million of costs. Second, the return depends most on how fast the halls fill: every empty MW still costs its build money and its share of operating costs. The risk is that the grid connection or transformers arrive late, so the building sits empty. As a next step, sign an anchor tenant for the first phase before committing to build all 20 MW.

Risks a strong answer names: A late grid connection leaves capacity built but unleasable; A large tenant can push the rent down in exchange for signing early; Rupee and dollar exchange rates affect a cost base partly in rupees.

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.