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A dairy company wants to enter a new country
The prompt
Illustrative numbers, fictional company. A dairy company in the United Arab Emirates has AED 1,000 million invested at home and earns an 18 percent ROIC; its cost of capital is 9 percent. Its advantage at home is a trusted brand plus a cold-chain delivery network that reaches most grocery shops every day. It wants to invest AED 400 million to enter a neighbouring country, where it has no brand and would have to build its own cold chain. It expects NOPAT of AED 20 million a year there by year three. Should it go ahead?
Your interviewer will share data as you ask for it. Ask clarifying questions, state a hypothesis, then lay out your structure out loud before you calculate.
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