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McKinsey Medium Merger & Acquisition

Adventure Capital

#Archaeology
ProHub Comment

This is a sophisticated investment analysis case that requires candidates to balance quantitative financial modeling with qualitative risk assessment in an unfamiliar industry. The case tests whether candidates can systematically identify and categorize costs, calculate present values for alternative revenue streams, and ultimately apply probabilistic reasoning to make a defensible recommendation despite ambiguity.

Estimated Time 26 minutes
Difficulty Medium
Source NYU
86 / 100
Your client is Idaho Johnson, an archeologist/adventurer who specializes in rare artifact recovery. They have just learned about the possibility of an incredibly valuable 6,000 year old crown buried in the Siwa Oasis of Northwestern Egypt. You have been hired to determine whether Idaho should launch an expedition to recover this artifact.

Clarifying Information

  1. He must self finance the dig, but he finds a buyer ahead of time and strikes the deal pending the recovery
  2. He learned about the treasure when a colleague came to him with a map she’s willing to sell to him
  3. He is currently located in Indiana
  4. The dig is estimated to take one year (12 months)
  5. He only wants to go on the expedition if he can make an expected ROI of 85%
  6. He believes he has a 20% chance of success of retrieving the artifact
  7. He has some equipment but would need to buy more for this expedition
Mock Interview
Interviewer

Your client is Idaho Johnson, an archeologist/adventurer who specializes in rare artifact recovery. They have just learned about the possibility of an incredibly valuable 6,000 year old crown buried in the Siwa Oasis of Northwestern Egypt. You have been hired to determine whether Idaho should launch an expedition to recover this artifact.

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
Structure Analysis Communication Business Sense Quantitative
Practicing...
Score coming soon
Practice this case with AI Mock Interview

Determine whether an archaeologist should fund a $500K expedition with an 80% expected ROI to recover a 6,000-year-old crown, given a 20% success rate and a required 85% ROI threshold. The analysis reveals the decision is finely balanced, with quantitative metrics slightly below the threshold but qualitative factors potentially justifying the investment.

Key Insights:

  1. Importance of categorizing costs into upfront, recurring, and opportunity costs for comprehensive financial analysis
  2. Present value calculations for comparing alternative deal structures (lump sum vs. revenue sharing)
  3. Probabilistic expected value analysis: (Success % × Upside) + (Failure % × Downside) versus required thresholds
  4. Recognition that ROI threshold misses by only 5 percentage points (80% vs. 85% required) leaves decision ambiguous
  5. Qualitative factors (personal fulfillment, future synergies, reputational benefits) can justify investment even when quantitative metrics marginally miss targets