Investment Evaluation and Capital Allocation Questions

Develop and apply systematic frameworks to evaluate investment opportunities and to allocate capital across projects or business initiatives. Core skills include building cash flow models, forecasting revenues and costs, estimating realistic cash flow timings, and calculating investment returns using metrics such as net present value, internal rate of return, return on investment, return on invested capital, and payback period. Candidates should be able to perform sensitivity analysis and scenario analysis on key valuation drivers, assess risk and downside cases, compare opportunities using consistent financial and strategic criteria, identify trade offs and opportunity costs, and make clear go no go and prioritization recommendations. Evaluation should integrate non financial factors including market size and growth potential, competitive intensity, strategic fit with company capabilities, resource requirements, timeline to revenue, execution risk, and regulatory or operational constraints. Where multiple opportunities compete for limited capital, demonstrate portfolio level thinking, allocation rules, and quantitative and qualitative reasoning for recommended capital distribution.