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McKinsey Medium Merger & Acquisition

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 26 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
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

Idaho Johnson must decide whether to self-finance a one-year expedition to recover a 6,000-year-old crown in Egypt. The analysis requires calculating $500K in total costs, valuing the museum buyer’s offer at $4.5M (better than the private collector’s $4M), and determining that the expected ROI of 80% falls just short of the required 85% threshold, making the investment marginally unfavorable despite being close to the hurdle rate.

Key Insights:

  1. Total expedition cost is $500K (40K upfront + 360K recurring + 100K opportunity cost)
  2. Museum deal valued at $4.5M using present value of perpetual cash flows ($450K annual revenue discounted at 15% minus 5% growth)
  3. Expected ROI of 80% = (900K - 500K)/500K, falling 5% short of required 85% hurdle rate
  4. Decision hinges on whether synergies, additional artifacts, or personal fulfillment justify the 20% success probability despite missing the ROI target