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Question 3 Calculations

In question three, I am confused as to whether the $40 M is annual or a once of payment? In the writing in the questions it is said that it is annual - 'Paying close to £46 million per year seems like a hefty investment', but in the calculation it seems to be once off - 'Total revenues – total costs = £196.6m - £40m - £18m = £138.6m '.

Which one is it?

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Top answer
on Feb 22, 2025
#1 rated McKinsey Coach

Hi there!

The 40M is an upfront investment cost for the integration of the platform. So it should only be deducted once. 

Thanks!
Cristian

Alessa
Coach
on Feb 24, 2025
xMcKinsey & Company | xBCG | +200 individual & group coachings | feel free to schedule a 15 min intro call for free

Hey there 🙂, based on the wording, the $40 million is intended to be an annual cost—as suggested by the phrase "paying close to £46 million per year"—so the calculation you mentioned likely represents just one year’s figures rather than a one-off payment. Best, Alessa 😇

Pedro
Coach
on Feb 28, 2025
Bain | EY-Parthenon | Former Principal | 1.5h session | 30% discount 1st session

Seems to be one-off. But in a real interview this is something you would be able to clarify.

Thabang
Coach
on Mar 01, 2025
Ex-McKinsey Consultant | McKinsey Top Coach & Interviewer | Special Offer: Buy 1 Session Get 1 Free (Limited time!)

Hey there, 

My read on this is that the $40m is a once-off cost, not annual

All the best

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