## Interview Question

Research Analyst Interview

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# If you had a machine that produced \$100 dollars for life what would you be willing to pay for it today?

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## Interview Answers

65 Answers

64

I already have the machine, why would I pay for it??

Anonymous on

47

I would not pay anything. Only the Federal Reserve can legally produce \$100 dollar bills.

Joel Camacho on

30

Why is this considered a top 10 odd interview question? It's a basic accounting question that applies to any applicant at a financial institution. Let's assume the proper phrasing of the question is "If you had a machine that produced a free \$100 dollars per year for life, what would you be willing to pay for it today?" Given that Aksia is a financial firm, they're basically asking what is the present value of a perpetuity with a \$100 annual payment. PV=pmt/r where: PV=PResent value PMT= payment per period r= discount rate Given current US fed reserve discount rate is 0.75%, the Present value of such a device would be \$13,333.33 Answer varies obviously if discount rate changes or if proper phrasing was meant to be \$100 for a different time period.

Anonymous on

25

What is "\$100 dollars"? That reads as "one hundred dollars dollars." What's a dollar dollar? Is it double value? Say \$100 or one hundred dollars; do not say both, in order to avoid being redundant.

Allie on

20

Depends entirely on how fast the machine produces the bills. Current price will be determined by estimated future yield which isn't defined here.

John on

14

Nothing, I already have it.

Steve on

33

No more than 100\$ for 100\$ for life

Jen on

16

I would pay nothing for it. \$100 dollars in a life? I can make that in one day...

Steve on

11

I am assuming the question is stated incorrectly. It should read: "\$100 per year for life". Let's say I expect to live another 50 years. Then in nominal terms, the machine produces \$50,000. My time-preference rate is 4 percent per year and let's suppose that the Federal Reserve does a good job of keeping inflation in their target range and averages 2 percent. Then the total discount rate is 6 percent per year. In present-value terms, the machine produces \$100 this year, \$94.34 next year [e.g. \$100/((1+r)^n) ], \$89.00 in two years, etc, for a sum of \$1,676.19. This is the present value of the machine and I would pay this much or less to own the machine. Now suppose that the machine actually produces real \$100 dollars (so increases the amount according to inflation). In that case the discount rate is 4 percent and I would pay a maximum of \$2,248.22. Obviously I'm using a calculator (Excel) to make these calculations, but the idea is the same.

RWK on

6

Nothing. According to the question, I already have it.

Anonymous on

6

absolutely nothing. \$100 dollars for a life time is ridiculous

Anonymous on

6

10 to 20 years is what I would have to pay for a machine like that, life is only for murder with special circumstances.

Jack on

4

Press NPV button on calculator.

Joe on

6

1) As many have stated, this is illegal. But putting that aside, 2) The way the question is presently phrased, technically "you" already have the machine so why would you pay anything? And also, there is a lack of clarity regarding the frequency of the machine's production of \$100 - daily, weekly, monthly, etc? The output frequency changes the entire question (because if you only receive \$100 once well why bother wasting x% of that \$100 by paying for the machine itself?), 3) But assuming this machine provides \$100 more than once, does it print a single \$100 bill or 100 \$1 bills (or other denominations)? Because based on that, what are the operating costs of this machine? How much does the paper cost? How much does the ink cost? How much does it cost to maintain this machine? The interviewer may or may not answer those questions depending on the interview style and format so I'd just go with "It's an illegal practice and I'd never do something so horrific and undermine the honest principles this country was founded upon!" :P

Anonymous on

3

It produces \$100 for each life it takes? Probably evil, would avoid.

Adam on

3

I would use it to buy a truckload of English usage manuals and distribute them to people who insist on uninformed mash-ups like "\$100 dollars". Are they anything like "ATM machines" or "square acres"?

Kelsey Grammar on

3

I'd be really worried that if it put out \$100 on the first day, I'd be dead the next day.

Anonymous on

4

I would pay nothing for a machine that produced dollars at a cost of \$100 each. What would you offer me to haul the machine away for you?

m rich on

1

The wording makes no sense. Saving money by using a hybrid car, LED bulbs, efficient appliances and HVAC, or solar is easier to calculate and pays way more than, \$100 a year.

Joe on

2

If I already have it, to whom would I pay anything and why? Silliness aside, you would need to know at least: Payment frequency Your life expectancy Some discount yield (subjective or otherwise) Then it's a matter of PV annuity, or PV perpetuity (if you are allowed to pass on payments after death)

Anonymous on

3

What are talking here? \$100 per day? Week? Month? Only once in a lifetime? Oh, and does the IRS have to know about this?

JRH on

2

Be specific. Does it produce \$100 every minute of your life or just once in your life? Will it produce enough for me to make bail and hire a lawyer after I'm arrested for counterfeiting?

Anonymous on

4

Whoever formulated this question does not speak good English. The question has no real discernible meaning. They should be fired and a qualified person should be given the job.

Andrew on

2

I will pay with a blank cheque; the seller puts whatever he/she wants; I just have to print it & deposit to my bank account.

Akter on

1

The majority of ppl answering this question, haven't even comprehended the question properly. Seriously.

Mpop on

1

I'd leave the interview with a company that produces such an incredibly poorly-worded question. "\$100 dollars?" So "one hundred dollars dollars?" Ok. Also, it doesn't specify any sort of rate at which it produces money. It doesn't say if it produces \$100 per day, nor does it say if it produces X amount of dollars per day until it reaches \$100 in a lifetime. As it is written, this question makes no sense, and the writer of it should be ashamed.

Anonymous on

1

I think the question has probably been misquoted . Probably meant "How much would you pay for a machine giving you \$100 per year for the rest of your life ". Its basically a PV of future cashflows ; simply if into perpetuity : = coupon / discount rate. The coupon being the \$100 . The Discount rate is the rate of the prevailing interest rate - usually take the yield of 30 yr UST here (say 3% for arguments sake) and add in a bit more if you fell there is any risk in holding the machine. (like some fool with a loaded gun trying to steal it of you) ie 100/ 0.03 = \$3,333 . This will be the maximum one should pay.

zach on

1

I'd pay someone to stop coming up with these stupid questions. Makes me not want to work for anyone. No wonder so many jobs go unfilled. Who wants to work with or for people that start off our first meeting with stupid head games. Chances are that all the job involves is pushing buttons, referring to manuals, taking calls, reading emails and forwarding and escalating issues to other employees. If I wanted to solve riddles, I'd apply to the Riddle Factory where such questions would be relevant.

Anonymous on

0

Well, if I had the machine, as the question indicates, then I would not have to pay for it if I already owned the machine, which the beginning of the questions indicates.

Anonymous on

0

I'll pay for another machine which produce money in such an easy way for sure.

Anonymous on

0

Nothing. It clearly is a scam

Swagata on

0

Learn to write a coherent question and then get back to me.

Stephen on

0

1) why would I pay for a machine I already own 2) \$100 for life is just a one time payment of \$100

trick question on

0

I am that machine, so nothing..

Anonymous on

0

id give my right nut for that machine.

Elijah Medina on

0

I wouldn't pay anything for it today, or the day I got it. What are "dollars for life" anyway? And why do they cost \$100?

Anonymous on

0

I want to earn money from my work not from machine

vanathy on

0

Who is life, and why would I want to pay for his/her machine?

Anonymous on

0

I would pay up to \$50 for it. Make 60,70,80 or \$90 then sell it for \$50+

Alexey on

0

Why would I pay for something that I already have?

TLG on

0

I would ask first the frequency of distribution, if that's daily/weekly/monthly etc.

Genti on

0

I would say that I have a policy of never buying something without testing it first and then when I was stood in front of the machine I would say how much do you want for it? Money is no object! :)

Michael Fisher on

0

I would first ask how easy is it to reproduce the machine. If it is less than \$100 to reproduce the machine, I would just recreate as many machines as possible and earn the difference. Then I will do some math to calculate the optimized price to pay for a desired annual income. And maybe in the future, invest some of the income to reduce production cost, reuse of old machines, etc.

Boxuan Cui on

0

I would pay \$6,500 for it. I plan to live to about 85 so I'd set up a payment plan and pay it off with the machine 1 hundred every year

Quinton on

0

\$100. That's all it's worth if it pays that for life.

Anonymous on

0

I already have it so I don't need to pay for it. But if I didn't have it and had to buy its details as mentioned above need to be answered such as \$100 a day month year number of times u can take it out. But you are basically putting your own money into a machine to give it back to you when you need it, sort of like an atm

Dee on

1

With that 100\$, i will buy another such machine. Now i have 2 machines, each of them generates 100\$, which is 200\$. With these 200\$, i will buy another 2 such machines, now i have 4 machines. I will buy another 4 machines, with 400\$, so on.. I will multiply so on, until i have enough money to solve everyone's problems of their lifetime !!!

Vivek on

0

Charity

Amit Kumar Srivastava on

0

Nothing, I already have it!

Anonymous on

0

Please define what \$100 dollars is. Is it \$100 or 100 dollars? USD? When does it produce this undefined amount? For my life or its? What are its operating and disposal costs? Is that in \$ dollars also? Where do you spend \$ dollars? There is nothing to base an answer on.

pjl on

0

Life is worth more than a hundred dollars!

Vince on

0

In the first place this is a trick question. It wasn't stated that the machine would produce 100 dollar bills. It stated 100 dollars for life. In the second place it would be counterfeiting so possession of this machine could get you a prison sentence, and no amount of money is worth loosing years of your life. I've noticed most of these questions are trick questions like how many people flew people don't fly plane's and birds do.

DJP on

0

One dollar. Why? Because I know a value when I see one. My deal, my value. Secure that one and you have it made.

Steve on

0

I'd want at least a 500% profit so \$20 at most.

Marc Tanner on

0

i will not pay anything. \$100 is the least I could get for free

Vikram on

0

\$100USD Dollars for life

Anonymous on

0

Honestly most people here haven't truly read the question. If I already had a machine that would make \$100 bills for the rest of my life, why would I have to pay any money at all to get it?

Richard on

0

I assume I can print the \$100 dollars unlimited number of times a day. I would tell the manufacturer that I can't pay for the machine now but I'm willing to pay them \$1,000 per day for the rest of my life. That'll come up to just 10 pcs for them each day and I'll print another 100 pcs for myself each day. That'll be \$10,000 for me everyday!

Joanne Lim on

0

No. Not worth it.

Anonymous on

2

Firstly, if it made \$100 for life, it wouldn't be worth anything. Secondly, if it's making money, it's illegal.

Anonymous on

3

Does such a machine exist? What? No? Then why are you asking this question ... MORON.

Ron on

0

Somebody has been watching too much Twilight Zone.

Ryan on

2

Nothing. Fiat money is either rendered worthless by uncontrollable inflation, or \$100 over a lifetime is not worth much.

Scott on

0

As much as I could lay my hands on. It could all be repaid instantly

Anonymous on

7

I would pay for everyone in my family to get a four year college degree and then their master's degree. I would cover the cost of books, supplies and dorm rooms or apartments near campus. I would buy a new car if they held a GPA over 2.00. I would buy them nice clothes and shoes so that they looked nice while attending class. I would also buy them a new coat to keep warm and an umbrella to keep the rain off of their heads. I would value education more than I can afford to do so now.

Anonymous on

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