Cash Sweep In LBO Modeling

This problem tests your understanding of how excess free cash flow is used in a leveraged buyout model and how that affects debt paydown over time. Candidates need to know the order of uses for cash, the difference between required and optional repayments, and why early repayment terms matter for different debt tranches. Interviewers ask this because cash sweep mechanics are central to projecting leverage, interest expense, and equity value creation in an LBO, and they want to see whether you can connect operating cash generation to the debt schedule.