Financial Analysis interview preparation

Questions

100

Traced to a firm

42

Firms

28

Updated

September 2026

Asked at

All firmsMoody's7Bain Capital3SSState Street3AMAres Management2BLBlackRock2DED.E. Shaw2MSMorgan Stanley2Oaktree Capital Management2S&P Global2Bridgewater Associates1Citadel1FTFranklin Templeton1Golub Capital1HWHarris Williams1Houlihan Lokey1J.P. Morgan1Jane Street1MWMarshall Wace1Millennium Management1Morningstar1PIMCO1Sycamore Partners1TSTruist Securities1Two Sigma1Vanguard1WMWellington Management1Wells Fargo Securities1Wolverine Trading1

Topic

All topicsThree statements9Accounting policy and standards5Working capital and cash7Ratio analysis8Forecasting and budgeting9Variance and management reporting7Unit economics and costing8Capital budgeting7Cost of capital and valuation7Markets and rates5Modelling, Excel and data8Business partnering6Brainteasers and estimation4Fit and career10

Level

AnyCoreIntermediateHard

Type

AnyTechnicalCaseBrainteaserMarket viewFit

1. 056What is MIRR, and what problem is it solving?Capital budgetingHardtechnicalCorporate financeFinancial modelling

   Say this

   MIRR fixes the reinvestment assumption in IRR. Instead of assuming interim cash flows compound at the IRR, you compound them forward at your actual reinvestment rate, discount the outflows at the finance rate, and solve for the single rate that links the two.

   Then walk it

   1. Mechanically: take the future value of all positive cash flows at the reinvestment rate, take the present value of all negative cash flows at the finance rate, then find the rate that grows one into the other over the project life.
   2. Because of that, MIRR is always lower than IRR when IRR exceeds the reinvestment rate, and the gap widens with project length. A ten-year project showing a 32 percent IRR might carry a 19 percent MIRR at a 12 percent reinvestment rate. That gap is the fiction you were quoting.
   3. It also gives you a single unique answer, so it solves the multiple-IRR problem for projects with alternating cash flow signs.
   4. Where it matters most is private equity and infrastructure, where cash is returned in chunks across a long hold. An early dividend recap flatters IRR enormously and barely moves MIRR, which is exactly why sponsors quote IRR.
   5. Two honest weaknesses: you now have to assume a reinvestment rate, which is another estimate; and MIRR is still a rate, so it does not fix the scale problem. A big low-MIRR project can still create more value than a small high-MIRR one.
   6. So my ranking stays NPV first for the decision, MIRR when I want a defensible rate to communicate, and IRR only because everyone asks for it.

   Where candidates lose it

   Describing the formula without naming the reinvestment assumption it repairs. And do not claim MIRR is better than NPV. It is a better rate, not a better decision rule, and the scale problem remains.

   Expect next

   • What reinvestment rate would you assume?
   • Why do sponsors prefer quoting IRR?
   • Does MIRR solve the scale problem?
2. 058I give you a list of possible projects with their values and their costs, and a fixed budget. How do you choose?Capital budgetingHardcase studyBridgewater AssociatesGeneralist · New York · 2025

   Say this

   Rank by value per rupee of the constrained resource, not by absolute value. Compute the profitability index, NPV divided by the capital required, take them in descending order until the budget runs out, then check the combinations near the cut-off because the greedy answer is not always optimal.

   Then walk it

   1. Profitability index is present value of inflows over the initial investment, or equivalently one plus NPV over investment. Anything above one adds value; ranking by it maximises value per unit of the scarce resource.
   2. A quick illustration. Budget 100. Project A: NPV 30, cost 60, index 0.50. Project B: NPV 18, cost 40, index 0.45. Project C: NPV 16, cost 40, index 0.40. Greedy picks A then B for 48 of NPV on 100 spent. Picking B and C gives 34. So A plus B wins, but you only know that because you checked.
   3. The reason you check is indivisibility. Projects cannot be taken in fractions, so this is a knapsack problem, and greedy ranking can leave budget stranded. With a handful of projects, enumerate the combinations; with many, solve it as an integer programme, which Excel Solver will do.
   4. Then the constraints that make it a real decision rather than an arithmetic one: mutual exclusivity where two projects do the same thing, dependencies where B requires A, and non-capital constraints like scarce engineering time, which may be the binding resource rather than money.
   5. Then the multi-period version. A project may be delayable, so the question becomes which projects this year and which next, and a one-year delay on a positive-NPV project has a real cost you should quantify rather than assume away.
   6. And I would flag the strategic overlay: some low-index projects are mandatory, safety, regulatory or IT security, so they come out of the budget before ranking begins. Pretending everything competes on index is how compliance projects get deferred until they become a crisis.

   Where candidates lose it

   Ranking by NPV alone, which strands capital, or by IRR, which ignores scale. The word the interviewer wants is profitability index, followed immediately by the acknowledgement that indivisibility makes greedy ranking imperfect.

   Expect next

   • What if two of the projects are mutually exclusive?
   • What if the binding constraint is engineers, not money?
   • How would you handle a project you can delay by a year?

   Reported by candidates at Bridgewater Associates (Generalist, New York, 2025). Source: Wall Street Oasis.

Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.