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Year Sales in Million

1999
2.9
2000
3.6
2001
4.3
2002
5.8
2003
2004
2005
2006
2007
2008
2009
2010
2011

Linear
1
2
3
4
5
6
7
8
9
10
11
12
13

2.74
3.68
4.62
5.56
6.5
7.44
8.38
9.32
10.26
11.2
12.14
13.08
14.02

Chart Title
f(x) = 0.94x + 1.8

5.8

5
4

4.3
Sales in
Million

3.6

3 2.9
2
1
0
1999

2000

Exponentia Log
2.8631852
2.6324
3.5881427 3.9563804
4.4966592 4.7308593
5.6352118 5.2803609
7.0620454 5.7065874
8.8501528 6.0548398
11.091008 6.349283
13.899248 6.6043413
17.418532 6.8293187
21.828899 7.0305678
27.355968 7.2126198
34.28249 7.3788202
42.962804 7.5317098

(c) 2006 Makuta Partners Pty Ltd

2001

2002

2.94
3.48
4.42
5.76
7.50
9.64
12.18
15.12
18.46
22.20
26.34
30.88
35.82

2003

2004

2005

2006

2.9
3.6
4.3
5.8

254970342.xls

2007

2008

2009

2010

2011

Discounted Cash Flow Analysis


Item Description
Cash Outflows
Total Capital Expenditure
Hardware and Software
Furniture and fixtures
Legal fees

Project Title:

Techpro e-bussiness system implementation

Year 0

Year 1

Year 2

Year 3

Year 4

180,000
20,000 .
5,000

60,000
0

0
0
0

0
0
0

0
0
0

0
0
0

240,000
20,000
5,000

Total tangible capital costs

205,000

60,000

265,000

Non recurring costs


Salaries and benefits (development)
Marketing Costs
Transportation
Training
Insurance

170,000
10,000
20,000
30,000
20,000

90,000
35,000
2,000
165,000
20,000

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

260,000
45,000
22,000
195,000
40,000

Total non-recurring costs

250,000

312,000

562,000

Recurring costs
Additional salary costs
Maintenance
Total recurring costs

120,000
0
120,000

120,000
20,000
140,000

0
35,000
35,000

0
35,000
35,000

0
35,000
35,000

0
35,000
35,000

Total Cash Outflows

575,000

512,000

35,000

35,000

35,000

35,000

0
0
0

80,000
10,000
90,000

82,400
20,000
102,400

84,872
20,000
104,872

87,418
30,000
117,418

90,041
30,000
120,041

80,000

120,000
25,000
20,000
269,872

180,000
28,000
20,000
345,418

220,000
28,000
20,000
388,041

710,000
111,000
85,000
1,440,731

234,872
-449,728

310,418
-139,310

353,041
213,731

213,731

5%
1.0000
0.9524
0.9070
0.8638
-$575,000 -$325,714 $210,794 $202,891
-$575,000 -$900,714 -$689,921 -$487,029

0.8227
$255,382
-$231,648

0.7835
$276,617
$44,969

$
$
$

Projected Cash Inflows/Tangible Benefits


Tangible Operating Cost Savings
Reduced staff costs (Admin & Sales)
Reduced operating costs (excluding personnel)
Nett tangible savings
Incremental revenue gains
Sales/Marketing cost reductions
Other cost savings (factory/warehouse)
Total Cash inflows
Nett Benefits
Cumulative Cash Flow
Investment Discount Rate
Discount Factors (at current discount rate)
Nett Discounted Cash Flow
Cumulative DCF
Nett Present Value (NPV via formula)
Internal Rate of Return (IRR)

(c) 2006 Makuta Partners Pty Ltd

170,000

110,000
30,000
25,000
267,400

-575,000
-575,000

-342,000
-917,000

232,400
-684,600

44,969
6.58%

Return on Investment =

254970342.xls

Year 5 Total Cost

4%

240,000 *Since the existing IT staff is sufficient


160,000
400,000
1,227,000

424,731 *Considering a 3% annual raise in salary.


110,000
534,731

$44,969

Item Description
Total Cash Outflows
Total Cash inflows
Net Benefits
Total Cash Outflows
Total Cash inflows
Nett Benefits

Year 0

Year 1
575000
0
-575000
470000
0
-470000

Options -->
Time
Investment
Year 1
Year 2
Year 3
Year 4
Year 5

Outflows
-575000
-512000
-35000
-35000
-35000
-35000

Year 2
512000
170000
-342000
357000
170000
-187000

Year 3
35000
267400
232400
25000
267400
242400

Year 4
35000
269872
234872
25000
269872
244872

35000
345418.16
310418.16
30000
345418.16
315418.16

Implement e-management system


In House
Contracted to Intact
Inflows
Net Benefits Outflows
Inflows
0
-575000
-470000
0
170000
-342000
-357000
170000
267400
232400
-25000
267400
269872
234872
-25000
269872
345418
310418
-30000
345418
388041
353041
-30000
388041

Year 5
35000
388040.7048
353040.7048
30000
388040.7048
358040.7048

cted to Intact
Net Benefits
-470000
-187000
242400
244872
315418
358041

Do Nothing
Net Benefits
0
0
0
0
0
0

Discounted Cash Flow Analysis

Project Title:

Item Description
Cash Outflows
Total Capital Expenditure
Hardware and Software
Furniture and fixtures
Consultant Fee (Intact)
Legal fees

Techpro e-bussiness system implementation

Year 0

Year 1

Year 2

Year 3

Year 4

180,000
20,000 .
80,000
10,000

50,000

0
0

0
0

0
0

0
0

60,000
0

230,000
20,000
140,000
10,000

Total tangible capital costs

290,000

110,000

400,000

Non recurring costs


Salaries and benefits (development)
Marketing Costs
Transportation
Training
Insurance

120,000
10,000
10,000
30,000
10,000

25,000
35,000
2,000
165,000
10,000

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

145,000
45,000
12,000
195,000
20,000

Total non-recurring costs

417,000

$
$
$
$

Year 5 Total Cost

AUD
$
$
$
$
$
$
$
$

98,550
269,370
194,618
46,428
229,950
837,894
239,148
161,272

180,000

237,000

Recurring costs
Additional salary costs
Maintenance
Total recurring costs

0
0
0

0
10,000
10,000

0
25,000
25,000

0
25,000
25,000

0
30,000
30,000

0
30,000
30,000

0 *Since the existing IT staff is sufficient


120,000
120,000

Total Cash Outflows

937,000

470,000

357,000

25,000

25,000

30,000

30,000

Projected Cash Inflows/Tangible Benefits


Tangible Operating Cost Savings
Reduced staff costs (Admin & Sales)
Reduced operating costs (excluding personnel)
Nett tangible savings

0
0
0

80,000
10,000
90,000

82,400
20,000
102,400

84,872
20,000
104,872

87,418
30,000
117,418

90,041
30,000
120,041

Incremental revenue gains


Sales/Marketing cost reductions
Other cost savings (factory/warehouse)
Total Cash inflows

80,000

170,000

110,000
30,000
25,000
267,400

120,000
25,000
20,000
269,872

180,000
28,000
20,000
345,418

220,000
28,000
20,000
388,041

710,000
111,000
85,000
1,440,731

-470,000
-470,000

-187,000
-657,000

242,400
-414,600

244,872
-169,728

315,418
145,690

358,041
503,731

503,731

5%
1.0000
0.9524
0.9070
0.8638
-$470,000 -$178,095 $219,864 $211,530
-$470,000 -$648,095 -$428,231 -$216,702

0.8227
$259,495
$42,794

0.7835
$280,534
$323,328

Nett Benefits
Cumulative Cash Flow
Investment Discount Rate
Discount Factors (at current discount rate)
Nett Discounted Cash Flow
Cumulative DCF
Nett Present Value (NPV via formula)
Internal Rate of Return (IRR)

323,328
18.80%

Linear
1
2
3
4
5
6
7
8
9
10
11
12
13

(c) 2006 Makuta Partners Pty Ltd

2.74
3.68
4.62
5.56
6.5
7.44
8.38
9.32
10.26
11.2
12.14
13.08
14.02

Return on Investment =

ExponentialLog
8631852
2.6324
881427
563804
966592
308593
5.6352118
803609
0620454
065874
501528
548398
11.091008 6.349283
99248
043413
18532
293187
28899
305678
55968
126198
34.28249
788202
62804
317098

2.94
3.48
4.42
5.76
7.50
9.64
12.18
15.12
18.46
22.20
26.34
30.88
35.82

67.5
184.5
133.3
31.8
157.5
573.9
163.8
110.46

plan
devlop
training
marketing
Capital investment
Total
Grant Approved
Grant Used

424,731 *Considering a 3% annual raise in salary.


110,000
534,731

inefficiencies in day to day operations, specifically the administrative overheads in managing their supply
chain
recording and tracking time spent on individual jobs performed within manufacturing
producing accurate quotations for new orders
cost effective production of prototypes for customer orders
over reliance on the use of paper based filing systems

$323,328

35%

2.9
3.6
4.3
5.8
$
$
$
$
$

9,490,000
10,862,400
12,234,800
13,607,200
14,979,600

254970342.xls

Discounted Cash Flow Analysis


Item Description
Cash Outflows
Total Capital Expenditure
Hardware and Software
Furniture and fixtures
Legal fees

Project Title:
Year 0

$
$
$

Year 2

Year 3

Year 4

Year 5 Total Cost

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

Total tangible capital costs

Non recurring costs


Salaries and benefits (development)
Marketing Costs
Transportation
Training
Insurance

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

Total non-recurring costs

Recurring costs
Additional salary costs
Maintenance
Total recurring costs

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0 *Since the existing IT staff is sufficient


0
0

Total Cash Outflows

Projected Cash Inflows/Tangible Benefits


Tangible Operating Cost Savings
Reduced staff costs (Admin & Sales)
Reduced operating costs (excluding personnel)
Nett tangible savings

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0 *Considering a 3% annual raise in salary.


0
0

Incremental revenue gains


Sales/Marketing cost reductions
Other cost savings (factory/warehouse)
Total Cash inflows

0
0

0
0

0
0
0
0

0
0
0
0

0
0
0
0

0
0
0
0

0
0
0
0

Nett Benefits
Cumulative Cash Flow

0
0

0
0

0
0

0
0

0
0

0
0

5%
1.0000
$0
$0

0.9524
$0
$0

0.9070
$0
$0

0.8638
$0
$0

0.8227
$0
$0

0.7835
$0
$0

Investment Discount Rate


Discount Factors (at current discount rate)
Nett Discounted Cash Flow
Cumulative DCF
Nett Present Value (NPV via formula)
Internal Rate of Return (IRR)

(c) 2006 Makuta Partners Pty Ltd

Techpro e-bussiness system implementation

Year 1

Err:523

Return on Investment =

254970342.xls

#DIV/0!

$0