How do you split four minutes on a paper LBO, and what accuracy is acceptable?
Say your answer out loud first, then open the model answer.
Show the model answer
Roughly one minute to set up, two minutes to run the five years, and one minute to read the result. I work to about two significant figures and accept an answer within about 5 percent. I talk through each line as I write it, so the interviewer can follow, and I leave time at the end for a sanity check rather than polishing the arithmetic.
What the interviewer listens for
One minute set up, two run, one read
Within about 5 percent is fine
Talk through each line
LBO Mechanics and Paper LBOs · INT.LB.4.a: Build a paper LBO and read off the IRR in under four minutes using rounding, a one-page set-up and sanity checks.
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