# Answering Guesstimate Interview Questions

## How many flat screen TVs have been sold in Australia in the past 12 months?

The population of Australia is approximately 24 million. Let’s assume that the average household comprises of2 people (there are a lot of families with 3 or 4 people, but this is balanced by those people who are living alone). So the number of homes is 12 million (provided that all people have a home).

Then we need to find out how many of the TVs in these 12 million homes will need to be replaced with new ones. Let’s assume that people need to replace their old TV with a new TV every six years and that every home has 1.5 TVs. Nowadays, it is reasonable to expect that all new TVs that are purchased have a flat screen. Therefore, the number of flat screen TVs that are purchased in Australia in one year is equal to:

frac {1}{6}~of~the~homes~buy~a~new~TV~this~year * 12~million~homes * 1.5~TVs~per~home = 3~million~flat~screen~TVs

## How many gallons of white house paint are sold in the US every year?

Find the number of homes in the US: Assuming that there are 300 million people in the US and the average household contains 2.5 people then we can conclude that there are 120 million homes in the US.

Number of houses: Many people live in apartments and other types of buildings different than houses. Let’s assume that the percentage of people living in houses is 50%. Hence, there are 60 million houses.

Houses that are painted in white: Although white is the most popular color, many people choose different paint colors for their houses or do not need to paint them (using other types of techniques in order to cover the external surface of the house). Let’s hypothesize that 30% of all houses are painted in white, which makes 18 million houses that are painted in white.

Repainting: People need to repaint their houses after a given amount of years. For the purposes of this exercise, let’s hypothesize that people repaint their houses once every 9 years, which means that every years 2 million houses are repainted in white.

I have never painted a house, but let’s assume that in order to repaint a house you need 30 gallons of white paint. This means the total US market for white house paint is 60 million gallons.

## What is the monthly profit of your favorite restaurant?

Pick a small family restaurant and not a chain of restaurants. This should make calculations much easier.

Then define the main parameters about the restaurant that we are talking about:

- Days of the week in which the restaurant is open
- Number of tables/seats
- Average number of visitors during lunch time
- Average number of visitors at dinner
- Average expenditure per client during lunch
- Average expenditure per client during dinner

The restaurant is open 6 days of the week (they are closed on Monday), which means that is open 25 times during lunch and dinner time per month. It is a small family restaurant with around 60 places. On average 30 customers visit the restaurant at lunch and 40 people come to have dinner. The typical lunch menu costs 10 euro, while a dinner at this restaurant costs twice that amount – 20 euro. Therefore, they are able to achieve revenues of:

25~(days) * 30~(customers) * 10~(EUR) = 7,500~EUR~(lunch)

25~(days) * 40~(customers) * 20~(EUR) = 20,000~EUR~(dinner)

The restaurant is able to achieve 27,500 EUR of sales. Besides, the owner and his wife 4 people work there as well. Let’s say that the 3 waiters make 2,000 EUR each and the chef makes 3,000 EUR (including social security contributions). So the cost of personnel is 9,000 EUR. Usually, food and drinks cost around one third of the overall amount of sales. Therefore Cost of goods sold amounts to 9,125 EUR. Utility and other expenses are another 10% of Sales, so we will have an additional cost of 2,750 EUR. The owners do not pay rent, because they own the place. After the calculations that we made, it results in a monthly profit of (before taxes) 6,625 EUR.