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1) On the grenade question, I think I would tell the guy that I wouldn't sell the grenade; I would simply give it away. I would then:
- give the interviewer the grenade;
- ask that he hold it at arms' length in front of him;
- take the tape off his desk;
- tape the grenade to his hand;
- pull the pin;
- and then ask the interviewer if he would like to buy a very expensive pin - one which was growing in value with every second.
2) On a more serious note: I think it is wise to not give, in any interview, information or skills which you usually sell. In fact, I know one multimedia producer who refuses to enter into a "bidding" situation. She insists that few contracts are actually based on the bidding process, and that this is often just a means of getting free "creatives." Consequently, when she is asked for a proposal, she agrees only if the company is willing to "buy" the proposal from her with the understanding that the proposal will include a full creative document. She then she sells it for a considerable amount of money. That way both her time and her creative skills are covered, and the company can do with it what they wish. This may be a bit difficult to do if you are not established or you are in a particularly competitive situation, but even under these considerations, I think you have to carefully consider if the time and effort involved is worth the risk of getting the contract.