Roi Analysis
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Investment overview Project name:
Cash flow and ROI statement BENEFIT DRIVERS Greater margin driven by higher production capacity Improved cycle time benefits: Reduced energy cost due to less running time Reduced labor cost due to less running time Fewer accidents, resulting in less workers' compensation Improved quality benefits: Fewer defects, resulting in less rework Fewer customer returns, resulting in less reprocessing costs Reduced time spent handling customer complaints
0
YEAR 1 $500,000
2 $1,000,000
3 $1,250,000
125,000 500,000 100,000
125,000 500,000 100,000
125,000 500,000 100,000
250,000 50,000 50,000
300,000 75,000 75,000
300,000 75,000 75,000
$1,575,000 85% $1,338,750
$2,175,000 90% $1,957,500
$2,425,000 95% $2,303,750
Costs Total
Benefits Annual benefit flow Cumulative benefit flow
Discounted benefit flow Discounted costs Discounted benefits Total discounted benefit flow Total cumulative discounted benefit flow
Initial investment Initial investment Implementation costs Ongoing support costs Training costs Other costs Total costs
Year 0 $1,650,000
Year 1 $125,000
Year 2 $125,000
Year 3 $125,000
Year 0 ($1,650,000) (1,650,000)
Year 1 $1,213,750 (436,250)
Year 2 $1,832,500 1,396,250
Year 3 $2,178,750 3,575,000
Year 0 $1,650,000 0 (1,650,000) (1,650,000)
Year 1 $108,696 1,164,130 1,055,435 (594,565)
Year 2 $94,518 1,480,151 1,385,633 791,068
Year 3 $82,190 1,514,753 1,432,563 2,223,632
Year 0 $1,200,000 400,000 0 50,000 0 $1,650,000
Year 1
Year 2
Year 3
$0 0 100,000 25,000 0 $125,000
$0 0 100,000 25,000 0 $125,000
$0 0 100,000 25,000 0 $125,000
ROI measures Cost of capital Net present value Return on investment Payback (in years)
15% $2,223,632 66% 1.24
143%
215%
