finance help! Prepare the financial section of a business case for the Video Gam
ID: 2799001 • Letter: F
Question
finance help! Prepare the financial section of a business case for the Video Game Delivery Project. Assume this project will take 12 months to complete and cost about $500,000 and monthly operating costs would be about $50,000 per month for year one and $60,000 per month for years two and three. Estimated benefits are about $1 million the first year after implementation and $2 million the following two years. Use the business case spreadsheet template from Templates link to help calculate the NPV, ROI, and year in which payback occurs. Assume a 7 percent discount rate.
Financial Analysis for Game Sync Date: ated by e Change te rpds, such as inesest ale, number of years, costs, and benetts Fomdas etered in e Excel Sie used to create ths bompiade Be sae to double-check he foruasExplanation / Answer
Year 0 1 2 3 NPV Cash outflows -500000 -600000 -720000 -720000 Cash inflows 0 1000000 2000000 2000000 Net operating profit -500000 400000 1280000 1280000 Present value factor 1 0.934579439 0.873438728 0.816297877 Present value -500000 373831.7757 1118001.572 1044861.282 2036694.63 Cumulative cash flows -100000 1180000 2460000 Payback is occuring in year 2 ie., per month cash inflow is 1280000/12=106666.67. So, the pay back period is 1 year and 1 month ROI= operating profit/Investment 0.8 -2.56 -2.56
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