BIZ CASE NPV

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Alternative 1 ; Sponsoring Automobile advancement for safety products. Cost Benefit Analysis Year 1 Year 2 Investment/cost Development of sample distribution method $1,500,000 $1,800,000 Sponsoring events (opreating Cost) $35,000 $25,000 booking spots on trade shows(operating cost) $38,000 $25,000 Total Cost $1,573,000 $1,850,000 Cummulative $1,573,000 $3,423,000 Benefit Year 1 Year 2 Profits from Sales $0 $4,850,000 Cummulative $0 $4,850,000 Net benefit (benefit-cost) ($1,573,000) $3,000,000 Cost benefit=benefit-operating cost/investments Cost benefit ratio 2.9 Year 1 Year 2 Cashflow ($1,573,000) $3,000,000 Discounted NPV 18% ($1,333,050) $2,154,553 Net present value $4,087,585 Internal rate of return 59.24% Pay back period 2 Alternative 1 : Sponsoring Automobile advancement for safety products. Input cost Year 1 Year 2 slaes in units 0 127,000 sales price per unit $85 $110 variable cost per unit $485 $475 profit (minimum) $38 $38 profit increase by 1% $38.38 $38.38 Total profit $0 $4,874,336 NPV & IRR after increasing profit by 1% Year 1 Year 2 Cashflow ($1,573,000) $3,024,336 Present value (18%) ($1,333,050) $2,172,031 Net present value $5,620,660 Internal rate of return 68.24%
change in NPV -27.2757113933239 sensitivity of NPV -27.2757113933239 change in IRR -13.1887456037515 sensitivity in IRR -13.1887456037515 Alternative 1 ; Sponsoring Automobile advancement for safety products. Input cost Year 1 Year 2 sales in units 0 127,000 sales price per unit $85 $110 variable cost per unit $485 $475 profit (minimum) $38 $38 profit decrease by 1% $37.62 $37.62 Total profit 0 $4,777,740.00 NPV &IRR after decreasing profit by 1% Year 1 Year 2 Cashflow ($1,573,000) $2,927,740.00 Present value (18%) ($1,333,050) $2,102,657.28 Net present value $5,454,147.75 Internal rate of return 56.32% change in NPV -25.0554772741534 Sensitivity on NPV -25.0554772741534 change in IRR 5.18465909090909 Sensitivity of IRR 5.18465909090909
Year 3 TOTAL $200,000 $3,500,000 2,000 $62,000 $1,500 $64,500 $203,500 $3,626,500 $3,626,500 $7,253,000 My Inc products Year 3 driver assistance system $5,570,000 $10,420,000 control modules $10,420,000 $20,840,000 lightning/mirrors $5,366,500 $6,793,500 Total revenue If the c Year 3 $5,366,500 $3,266,082 Total revenue . Year 3 Total 210,000 337,000 $130 $325 $465 $1,425 $38 $114 $38.38 $115.14 $8,059,800 $12,934,136 Year 3 $7,856,300 $9,307,636 $4,781,679 1 $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000
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