Sample interview questions: Can you provide examples of how you have used financial models to analyze and optimize investment in innovation and new product development?
Sample answer:
-
Analyzed the potential return on investment (ROI) of a new product launch. Built a detailed financial model to forecast sales, costs, and profits for the new product over a five-year period. Conducted sensitivity analysis to assess the impact of various factors, such as pricing, marketing spend, and competitive dynamics. Recommended that the company proceed with the launch, as the model projected a positive ROI of 15%.
-
Optimized the investment in a research and development (R&D) project. Developed a financial model to evaluate the potential benefits and costs of two alternative R&D projects. The model incorporated factors such as the probability of success, the potential market size, and the development costs. Recommended that the company pursue the project with the higher potential ROI, which was a new drug therapy for a rare disease.
-
Evaluated the acquisition of a startup company. Constructed a financial model to assess the value of the target company and the potential impact of the acquisition on the acquiring company’s financial statements. Conducted due diligence to verify the accuracy of the target company’s financial information. Recommended that the acquiring company proceed with the acquisition, as the model … Read full answer