Capital One

## Interview Question

Data Analyst Interview

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# Case interview: basic business problem (if product X costs Capital One \$4.00 per unit, with a \$800 sunk cost, and we charge X amount of dollars along with a \$10 annual fee, how many do we need to sell to break even, etc). Followed by a longer discussion of more complex problems that the situation might entail.

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## Interview Answers

8 Answers

3

Actually, to correct the above response, if the selling price for 1 product is \$794 (to cover the cost price of the product itself (\$4) ), only 1 quantity needs to be sold. (\$794 + \$10) = (\$800 + \$4).

Anonymous on

2

let's say we should sell y+1 units to break even 800 + 4.y = y*x + 10*y 800 = y(x + 10 - 4) 800/(x+6) = y so we should sell (800/(x+6)) + 1 units

Elif A. on

4

How is it possible to answer this without knowing the selling price per product? # of quantities to sell in order to breakeven depends on how much the selling price per product is? Since the selling price says X, you can sell it for \$790 and breakeven by just selling 1 product (\$790 per product + \$10 annual fee (assuming it's per product)). But I may be misunderstanding the information provided. Any feedback?

Anonymous on

8

Erin - it probably shouldn't be. The Revenue side should be (unit price + 10) * number of units sold. Dapo has assumed that unit price and number of units sold is the same since the letter X is used to describe both variables. That might be correct, but it would be an odd quirk of the question - I'd bet that you can ask what the unit price is.

Andy on

11

Why is x^2?

Erin on

10

Mostly algebra, basic economics, and common sense.

Anonymous on

10

very good if all 3 of you are interviewing, I can get the position. It doesn't say the annual fee is per product, so you have to assume or ask if it is the case, and if not the # of customer and potential customers estimation. And that x^2 Dapo, did you pass the online test?

Anonymous on

19

total cost= 4x + 800 total income= x^2 + 10x to break even: 4x + 800 = x^2 + 10x solving for x by evaluating the quadratic equation above, x ~= 25.45 To break even, 26 units must be sold

Dapo on

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