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McKinsey Medium Investment Decision

Adventure Capital

#Archaeology
ProHub Comment

This case tests deductive reasoning in an unfamiliar industry by requiring candidates to build a comprehensive cost model, value competing offers using present value analysis, and calculate expected return on investment under uncertainty. The case challenges candidates to identify factors both supporting and opposing the investment while staying focused on the 85% ROI hurdle rate that drives the final recommendation.

Estimated Time 15 minutes
Difficulty Medium
Source NYU
50 / 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