Regular automation

unit Sales 1st year 1300 1300

Unit price 1st year 1700 1700
sales growth rate 100% 100%
unit mnf cost 1st year 1000 800
price decline per year 15% 15%
manf cost decline per yr 6% 6%
fixed cost 1000000.00 2000000.00
marketing expenses 14% 14%
unit price reductin due to
automation 20% due to decrease in mnf cost
increase in fixed cost 100%
Discount rate 15%

Year 1 Year 2 Year 3 Year 4 Year 5

Unit sales 1300 2600 5200 10400 20800
Unit price 1700 1445 1228.25 1044.0125 887.410625
Revenue 2210000 3757000 6386900 10857730 18458141
Unit mnf cost 1000 940 883.6 830.584 780.74896
Total Var. Cost 1300000 2444000 4594720 8638073.6 16239578.368
Marketing exp 309400 525980 894166 1520082.2 2584139.74
fixed cost 1000000.00 1000000.00 1000000.00 1000000.00 1000000.00
Profit before tax -399400.00 -212980.00 -101986.00 -300425.80 -1365577.11

Year 1 Year 2 Year 3 Year 4 Year 5

Unit Mnf cost 800 752 706.88 664.4672 624.599168
Total var. cost 1040000 1955200 3675776 6910458.88 12991662.6944
fixed cost 2000000.00 2000000.00 2000000.00 2000000.00 2000000.00
profit before tax -1139400.00 -724180.00 -183042.00 427188.92 882338.57

Should we Automate? NO NO NO YES YES

Actual PBT -399400.00 -212980.00 -101986.00 427188.92 882338.57

NPV

Sales
Growth
Rate ₹ 107,519.58
50% ₹ 107,519.58
55% ₹ 107,519.58
60% ₹ 107,519.58
65% ₹ 107,519.58
70% ₹ 107,519.58
75% ₹ 107,519.58
80% ₹ 107,519.58
85% ₹ 107,519.58
 90% ₹ 107,519.58
95% ₹ 107,519.58
100% ₹ 107,519.58
 Without Automation

Data Tab-->What if analysis + Data Tab-->Scenario Manager

With Automation

₹ 107,519.58
->Scenario Manager