Labour and material costs

Activity WBS # Labour cost Material cost

xxx xx xx xx
xxx xx xx xx
xxx xx xx xx

Total R 20,000.00 R 10,000.00

Project overheads
Description Cost
Marketing consultants R 20,000.00
Internet & cellphone costs R 5,000.00
Computers & software R 8,000.00
Fixtures and equipment R 50,000.00

Total overhead costs R 83,000.00

Total project cost R 113,000.00

 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Revenue R 150,000.00 R 165,000.00 R 181,500.00 R 199,650.00 R 219,615.00 R 241,576.50
Cost of goods sold R 70,000.00 R 75,600.00 R 81,648.00 R 88,179.84 R 95,234.23 R 102,852.97
Gross profit R 80,000.00 R 89,400.00 R 99,852.00 R 111,470.16 R 124,380.77 R 138,723.53

Operating expenses R 51,000.00 R 54,460.00 R 58,163.60 R 62,128.70 R 66,374.56 R 70,921.95

Rent R 24,000.00 R 25,440.00 R 26,966.40 R 28,584.38 R 30,299.45 R 32,117.41
Maintenance R 5,000.00 R 5,500.00 R 6,050.00 R 6,655.00 R 7,320.50 R 8,052.55
Internet and data R 12,000.00 R 12,720.00 R 13,483.20 R 14,292.19 R 15,149.72 R 16,058.71
Salaries R 10,000.00 R 10,800.00 R 11,664.00 R 12,597.12 R 13,604.89 R 14,693.28

Net income R 29,000.00 R 34,940.00 R 41,688.40 R 49,341.46 R 58,006.21 R 67,801.58

Start-up loan from PerfexiVentures

Principal amount R 80,000.00

Repayment periods years
Number of repayment periods 3
Interest rate 16% compounded annually
Yearly repayments (R35,620.63)
 Cash flow timeline
First cost Rent (prepaid) Operating expenses Gross profit Loan principal Loan repayment Net cash flow
0 R (113,000.00) R (24,000.00) R 80,000.00 R (57,000.00)
1 R (25,440.00) R (27,000.00) R 80,000.00 (35,620.63) R (8,060.63)
2 R (26,966.40) R (29,020.00) R 89,400.00 (35,620.63) R (2,207.03)
3 R (28,584.38) R (31,197.20) R 99,852.00 (35,620.63) R 4,449.79
4 R (30,299.45) R (33,544.31) R 111,470.16 R 47,626.40
5 R (32,117.41) R (36,075.11) R 124,380.77 R 56,188.25
6 R (38,804.54) R 138,723.53 R 99,919.00

MARR 18.00%
NPV R 23,430.90

Inflation rate 4.6%

NPV R98,111.49
 Worst case
Labour and material costs
Activity WBS # Labour cost Material cost
xxx xx xx xx
xxx xx xx xx
xxx xx xx xx

Total R 20,000.00 R 10,000.00

Project overheads
Description Cost
Marketing consultants R 40,000.00
Internet & cellphone costs R 5,000.00
Computers & software R 8,000.00
Fixtures and equipment R 80,000.00

Total overhead costs R 133,000.00

Total project cost R 163,000.00

Most likely case

Labour and material costs
Activity WBS # Labour cost Material cost
xxx xx xx xx
xxx xx xx xx
xxx xx xx xx

Total R 20,000.00 R 10,000.00

Project overheads
Description Cost
Marketing consultants R 20,000.00
Internet & cellphone costs R 5,000.00
Computers & software R 8,000.00
Fixtures and equipment R 50,000.00
 Total overhead costs R 83,000.00

Total project cost R 113,000.00

Best case
Labour and material costs
Activity WBS # Labour cost Material cost
xxx xx xx xx
xxx xx xx xx
xxx xx xx xx

Total R 20,000.00 R 10,000.00

Project overheads
Description Cost
Marketing consultants R 15,000.00
Internet & cellphone costs R 5,000.00
Computers & software R 4,000.00
Fixtures and equipment R 40,000.00

Total overhead costs R 64,000.00

Total project cost R 94,000.00

 Worst case
Year 1 Year 2 Year 3
Revenue R 80,000.00 R 88,000.00 R 96,800.00
Cost of goods sold R 20,000.00 R 21,600.00 R 23,328.00
Gross profit R 60,000.00 R 66,400.00 R 73,472.00

Operating expenses R 51,000.00 R 54,460.00 R 58,163.60

Rent R 24,000.00 R 25,440.00 R 26,966.40
Maintenance R 5,000.00 R 5,500.00 R 6,050.00
Internet and data R 12,000.00 R 12,720.00 R 13,483.20
Salaries R 10,000.00 R 10,800.00 R 11,664.00

Net income R 9,000.00 R 11,940.00 R 15,308.40

Most likely case

Year 1 Year 2 Year 3
Revenue R 150,000.00 R 165,000.00 R 181,500.00
Cost of goods sold R 70,000.00 R 75,600.00 R 81,648.00
Gross profit R 80,000.00 R 89,400.00 R 99,852.00

Operating expenses R 51,000.00 R 54,460.00 R 58,163.60

Rent R 24,000.00 R 25,440.00 R 26,966.40

Maintenance R 5,000.00 R 5,500.00 R 6,050.00
Internet and data R 12,000.00 R 12,720.00 R 13,483.20
Salaries R 10,000.00 R 10,800.00 R 11,664.00

Net income R 29,000.00 R 34,940.00 R 41,688.40

Best case
Year 1 Year 2 Year 3
Revenue R 200,000.00 R 220,000.00 R 242,000.00
Cost of goods sold R 100,000.00 R 108,000.00 R 116,640.00
Gross profit R 100,000.00 R 112,000.00 R 125,360.00

Operating expenses R 51,000.00 R 54,460.00 R 58,163.60

Rent R 24,000.00 R 25,440.00 R 26,966.40
Maintenance R 5,000.00 R 5,500.00 R 6,050.00
Internet and data R 12,000.00 R 12,720.00 R 13,483.20
Salaries R 10,000.00 R 10,800.00 R 11,664.00

Net income R 49,000.00 R 57,540.00 R 67,196.40

st case
Year 4 Year 5 Year 6
R 106,480.00 R 117,128.00 R 128,840.80
R 25,194.24 R 27,209.78 R 29,386.56
R 81,285.76 R 89,918.22 R 99,454.24

R 62,128.70 R 66,374.56 R 70,921.95

R 28,584.38 R 30,299.45 R 32,117.41
R 6,655.00 R 7,320.50 R 8,052.55
R 14,292.19 R 15,149.72 R 16,058.71
R 12,597.12 R 13,604.89 R 14,693.28

R 19,157.06 R 23,543.66 R 28,532.29

kely case
Year 4 Year 5 Year 6
R 199,650.00 R 219,615.00 R 241,576.50
R 88,179.84 R 95,234.23 R 102,852.97
R 111,470.16 R 124,380.77 R 138,723.53

R 62,128.70 R 66,374.56 R 70,921.95

R 28,584.38 R 30,299.45 R 32,117.41

R 6,655.00 R 7,320.50 R 8,052.55
R 14,292.19 R 15,149.72 R 16,058.71
R 12,597.12 R 13,604.89 R 14,693.28

R 49,341.46 R 58,006.21 R 67,801.58

t case
Year 4 Year 5 Year 6
R 266,200.00 R 292,820.00 R 322,102.00
R 125,971.20 R 136,048.90 R 146,932.81
R 140,228.80 R 156,771.10 R 175,169.19

R 62,128.70 R 66,374.56 R 70,921.95

R 28,584.38 R 30,299.45 R 32,117.41
R 6,655.00 R 7,320.50 R 8,052.55
R 14,292.19 R 15,149.72 R 16,058.71
R 12,597.12 R 13,604.89 R 14,693.28

R 78,100.10 R 90,396.54 R 104,247.24

 Expected NPV based on uniform probabilities and s
EV(NPV) R 11,929.18

Worst case (project budget & gross profit)

Cash flow timeline
First cost Rent (prepaid) Operating expenses Gross profit Loan principal
0 R (163,000.00) R (24,000.00) R 80,000.00
1 R (25,440.00) R (27,000.00) R 60,000.00
2 R (26,966.40) R (29,020.00) R 66,400.00
3 R (28,584.38) R (31,197.20) R 73,472.00
4 R (30,299.45) R (33,544.31) R 81,285.76
5 R (32,117.41) R (36,075.11) R 89,918.22
6 R (38,804.54) R 99,454.24

Most likely (project budget & gross profit)

Cash flow timeline
First cost Rent (prepaid) Operating expenses Gross profit Loan principal
0 R (113,000.00) R (24,000.00) R 80,000.00
1 R (25,440.00) R (27,000.00) R 80,000.00
2 R (26,966.40) R (29,020.00) R 89,400.00
3 R (28,584.38) R (31,197.20) R 99,852.00
4 R (30,299.45) R (33,544.31) R 111,470.16
5 R (32,117.41) R (36,075.11) R 124,380.77
6 R (38,804.54) R 138,723.53

Best case (project budget & gross profit)

Cash flow timeline
First cost Rent (prepaid) Operating expenses Gross profit Loan principal
0 R (94,000.00) R (24,000.00) R 80,000.00
1 R (25,440.00) R (27,000.00) R 100,000.00
2 R (26,966.40) R (29,020.00) R 112,000.00
3 R (28,584.38) R (31,197.20) R 125,360.00
4 R (30,299.45) R (33,544.31) R 140,228.80
5 R (32,117.41) R (36,075.11) R 156,771.10
6 R (38,804.54) R 175,169.19
lities and simple scenarios Expected NPV based on
EV(NPV)

ross profit) Weighted

Loan repayment Net cash flow First cost
R (107,000.00) 0 R (118,166.67)
(35,620.63) R (28,060.63) 1
(35,620.63) R (25,207.03) 2
(35,620.63) R (21,930.21) 3
R 17,442.00 4
R 21,725.69 5
R 60,649.70 6

MARR 18%
NPV R (121,271.44)

ross profit)
Loan repayment Net cash flow
R (57,000.00)
(35,620.63) R (8,060.63)
(35,620.63) R (2,207.03)
(35,620.63) R 4,449.79
R 47,626.40
R 56,188.25
R 99,919.00

MARR 18%
NPV R 23,430.90

oss profit)
Loan repayment Net cash flow
 R (38,000.00)
(35,620.63) R 11,939.37
(35,620.63) R 20,392.97
(35,620.63) R 29,957.79
R 76,385.04
R 88,578.58
R 136,364.65

MARR 18%
NPV R 133,628.09
pected NPV based on project management rule of thumb (b
R 17,680.04

Weighted mean parameter approach

Cash flow timeline
Rent (prepaid) Operating expenses Gross profit Loan principal
R (24,000.00) R 80,000.00
R (25,440.00) R (27,000.00) R 80,000.00
R (26,966.40) R (29,020.00) R 89,333.33
R (28,584.38) R (31,197.20) R 99,706.67
R (30,299.45) R (33,544.31) R 111,232.53
R (32,117.41) R (36,075.11) R 124,035.40
R (38,804.54) R 138,252.93
nt rule of thumb (beta distribution)

proach
Loan repayment Net cash flow
R (62,166.67)
(35,620.63) R (8,060.63)
(35,620.63) R (2,273.70)
(35,620.63) R 4,304.45
R 47,388.77
R 55,842.88
R 99,448.39

MARR 18%
NPV R 17,680.04