Interview Question: How would you valuate a person's NPV
So I heard some firms asking this question.
My first thought was "What is this a consulting firm?"
But how would you really go about this question?
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Thats not exactly tough, you would try and work out all of their free cash flows (how much they will earn - how much they spend on food, housing etc) and then discount them back to their NPV. You could use their pension pot when they retire as their terminal value with the discount rate being an average between their credit card interest rate, unsecured loan rate and mortgage. I think that would do...
Its just a DCF, but with a person.
Or I guess if you wanted to be creative, then you could do a some of the parts, so assets like house car etc. minus all their debt, plus the value of their body parts. I heard a human body is worth over $300k in organ donations alone. Compatibles would be tough, unless you tried to compare them to the price of a slave etc.
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