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01First RoundValuation & Multiples
Operating leverage in three moves
$100 revenue, 20% EBITDA margin, costs 50/50 fixed vs. variable; volume increases 10%. Find EBITDA.
Separate fixed and variable costs before applying volume growth.
Starting cost base$100 revenue at a 20% EBITDA margin means $20 EBITDA and $80 of costs.
Split the costsA 50/50 split means $40 fixed and $40 variable costs.
Apply 10% volume growthRevenue becomes $110. Variable costs become $44; fixed costs stay $40. EBITDA is $26, up 30%.
02First RoundLBO & Private Equity
Build the sponsor return
$150M EBITDA at 10x, 60% debt; $300M of debt is repaid with no extra cash; EBITDA grows to $200M in 5 years; exit at 9x. What are MOIC and IRR?
Move from entry value to exit equity, then convert the multiple of money into an annual return.
Entry$150M EBITDA × 10.0x = $1,500M EV. At 60% debt, entry debt is $900M and sponsor equity is $600M.
Exit$200M EBITDA × 9.0x = $1,800M EV. After $300M of debt paydown, exit debt is $600M.
ReturnExit equity is $1,200M. $1,200M / $600M = 2.0x MOIC, which is about a 15% five-year IRR.
03Third RoundBrain Teasers & Math
Mental math, shown cleanly
What is 17 x 23? What is the angle between the hour and minute hands at 2:50?
Use a shortcut for the multiplication and track both clock hands from 12.
17 × 23Use difference of squares: (20 - 3)(20 + 3) = 20² - 3² = 400 - 9 = 391.
Minute handAt 2:50, the minute hand is at 50 × 6° = 300°.
Hour handThe hour hand is at 2 × 30° + 50 × 0.5° = 85°. The smaller angle is 145°.
More questions
The remaining prompts stay closed until you commit to an answer. Round labels come from the workbook source, not a fixed interview script.
First RoundAccounting
1. You have an asset worth $80 (book value) that you sell for $100 - walk me through the statements (assume 20% tax).
Check the worked answer
Gain = $20. IS: gain +20, taxes +4, NI +$16. CFS: NI +16, less gain -20 (CFO), proceeds +100 (CFI) -> cash +$96. BS: cash +96, asset -80 -> assets +16; retained earnings +16 -> balances.
Technical AssessmentBrain Teasers & Math
2. A game: you roll a die and earn the dollar value shown. You can keep the roll or roll once more (and then must keep the second roll). How much would a rational investor pay to play?
Check the worked answer
Expected value of a single roll = $3.50. Strategy: after the first roll, keep it if it's 4, 5 or 6 (greater than 3.5), otherwise reroll. EV = P(4-6) x avg(4,5,6) + P(1-3) x 3.50 = 0.5 x 5 + 0.5 x 3.5 = $4.25. Pay up to $4.25.
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