Scribd Logo
Upload

Welcome to Scribd!

  • Session 6

    Uploaded by

    KAVYA GOYAL PGP 2021-23 Batch
    4 views4 pages
    The document compares the financial projections of a normal business model to an automated one over 5 years. For the normal model, profits are negative for the first 3 years but become positive in years 4 and 5 once automation is adopted. For the automated model, profits are negative in the first year but become positive sooner, in years 2-5. Cumulative profits are higher overall for the automated model.

    Original Description:

    Original Title

    Session6

    Copyright

    © © All Rights Reserved

    Available Formats

    XLSX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document compares the financial projections of a normal business model to an automated one over 5 years. For the normal model, profits are negative for the first 3 years but become positive in years 4 and 5 once automation is adopted. For the automated model, profits are negative in the first year but become positive sooner, in years 2-5. Cumulative profits are higher overall for the automated model.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    4 views4 pages

    Session 6

    Uploaded by

    KAVYA GOYAL PGP 2021-23 Batch
    The document compares the financial projections of a normal business model to an automated one over 5 years. For the normal model, profits are negative for the first 3 years but become positive in years 4 and 5 once automation is adopted. For the automated model, profits are negative in the first year but become positive sooner, in years 2-5. Cumulative profits are higher overall for the automated model.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 4

    Normal Automated

    Unit Sales First Yr. 1300 1300


    Unit Price First Yr. 1700 1700
    Sales Growth Rate 100% 100%
    Unit Manf. Cost First Yr. 1000 800
    Manf. Cost Decline Rate 6% 6%
    Price Decline Rate 15% 15%
    Marketing Exp. 14% 14%
    Fixed Cost / yr. 1,000,000 2,000,000
    Discount Rate 11%
    Fixed Cost Change (Auto) 100%
    Manf. Cost Change (Auto) 20%

    Normal Year1 Year2 Year3 Year4 Year5


    Units Sold 1300 2600 5200 10400 20800
    Unit Price 1700 1445 1228 1044 887
    Revenue 2210000 3757000 6386900 10857730 18458141
    Marketing Expen. 309400 525980 894166 1520082 2584140
    Unit Manf. Cost 1000 940 884 831 781
    Manf. Cost 1300000 2444000 4594720 8638073.6 16239578
    Total Var. Cost 1609400 2969980 5488886 10158155.8 18823718.108
    Fixed Cost 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
    Profit Before Tax -399,400 -212,980 -101,986 -300,426 -1,365,577

    Automate? NO NO NO YES YES


    Actual PBT -399,400 -212,980 -101,986 427,189 882,339
    Cumul. Profit -399,400 -612,380 -714,366 -287,177 595,161

    Automated
    Units Sold 1300 2600 5200 10400 20800
    Unit Price 1700 1445 1228 1044 887
    Revenue 2210000 3757000 6386900 10857730 18458141
    Marketing Expen. 309400 525980 894166 1520082.2 2584139.74
    Unit Manf. Cost 800 752 707 664 625
    Manf. Cost 1040000 1955200 3675776 6910458.88 12991662.694
    Total Var. Cost 1349400 2481180 4569942 8430541.08 15575802.434
    Fixed Cost 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000
    Profit Before Tax -1,139,400 -724,180 -183,042 427,189 882,339
    € ₹ 197,777.12 10% 11%
    50% ₹ -523,839.13 ₹ -868,240.47
    55% ₹ -207,001.82 ₹ -589,413.97
    60% ₹ 134,557.08 ₹ -289,021.49
    65% ₹ 502,208.44 ₹ 34,132.43
    70% ₹ 937,525.56 ₹ 421,440.83
    75% ₹ 1,425,127.95 ₹ 857,338.14
    80% ₹ 1,946,901.84 ₹ 1,323,520.63
    85% ₹ 2,504,479.67 ₹ 1,821,425.91
    90% ₹ 3,099,532.58 ₹ 2,352,525.49
    95% ₹ 3,733,770.45 ₹ 2,918,324.73
    100% ₹ 4,408,941.89 ₹ 3,520,362.88

    (d) Yrly Sales Growth Rate ₹ 197,777.12


    50% ₹ -2,164,211.35
    55% ₹ -2,027,260.19
    60% ₹ -1,880,442.24
    65% ₹ -1,723,209.15
    70% ₹ -1,514,832.80
    75% ₹ -1,271,561.55
    80% ₹ -1,012,399.75
    85% ₹ -736,628.22
    90% ₹ -443,511.74
    NPV ₹ -1,615,553.78 95% ₹ -132,299.05
    Actual NPV ₹ 197,777.12 100% ₹ 197,777.12
    12% 13% 14% 15% 16% 17%
    ₹ -1,204,332.41 ₹ -1,532,261.59 ₹ -1,852,173.27 ₹ -2,164,211.35 ₹ -2,468,518.34 ₹ -2,765,235.40
    ₹ -962,480.41 ₹ -1,326,367.39 ₹ -1,681,239.61 ₹ -2,027,260.19 ₹ -2,364,590.70 ₹ -2,693,391.14
    ₹ -702,123.82 ₹ -1,104,937.68 ₹ -1,497,649.08 ₹ -1,880,442.24 ₹ -2,253,499.60 ₹ -2,617,001.84
    ₹ -422,237.03 ₹ -867,111.24 ₹ -1,300,699.51 ₹ -1,723,209.15 ₹ -2,134,845.44 ₹ -2,535,811.67
    ₹ -81,601.50 ₹ -571,838.43 ₹ -1,049,504.71 ₹ -1,514,832.80 ₹ -1,968,052.91 ₹ -2,409,393.01
    ₹ 304,037.97 ₹ -235,037.52 ₹ -760,150.74 ₹ -1,271,561.55 ₹ -1,769,527.29 ₹ -2,254,302.76
    ₹ 716,193.74 ₹ 124,625.88 ₹ -451,475.42 ₹ -1,012,399.75 ₹ -1,558,433.91 ₹ -2,089,861.82
    ₹ 1,156,114.84 ₹ 508,218.27 ₹ -122,588.80 ₹ -736,628.22 ₹ -1,334,218.66 ₹ -1,915,675.61
    ₹ 1,625,079.48 ₹ 916,830.83 ₹ 227,419.31 ₹ -443,511.74 ₹ -1,096,315.47 ₹ -1,731,341.51
    ₹ 2,124,395.06 ₹ 1,351,579.34 ₹ 599,479.39 ₹ -132,299.05 ₹ -844,146.34 ₹ -1,536,448.90
    ₹ 2,655,398.13 ₹ 1,813,604.25 ₹ 994,542.16 ₹ 197,777.12 ₹ -577,121.29 ₹ -1,330,579.14
    18% 19% 20%
    ₹ -3,054,502.32 ₹ -3,336,457.50 ₹ -3,611,237.99
    ₹ -3,013,819.95 ₹ -3,326,034.01 ₹ -3,630,188.63
    ₹ -2,971,127.87 ₹ -3,316,054.82 ₹ -3,651,958.03
    ₹ -2,926,309.13 ₹ -3,306,537.08 ₹ -3,676,692.80
    ₹ -2,839,078.77 ₹ -3,257,333.64 ₹ -3,664,378.78
    ₹ -2,726,140.20 ₹ -3,185,289.33 ₹ -3,631,997.32
    ₹ -2,606,964.58 ₹ -3,110,020.43 ₹ -3,599,304.77
    ₹ -2,481,311.40 ₹ -3,031,435.19 ₹ -3,566,352.97
    ₹ -2,348,935.94 ₹ -2,949,441.34 ₹ -3,533,196.74
    ₹ -2,209,589.26 ₹ -2,863,946.02 ₹ -3,499,893.90
    ₹ -2,063,018.19 ₹ -2,774,855.85 ₹ -3,466,505.21

    You might also like