| Innovative Investing Corporation: Capital Budgeting |
| DCF Analysis for the Investomatic Project - Live Model for Student Analysis |
| Project Financial Projections |
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| Note: Adjustments can be made to the model via the yellow cells ONLY |
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| 2024 |
2025 |
2026 |
2027 |
2028 |
2029 |
2030 |
2031 |
2032 |
2033 |
2034 |
| Pricing Model |
| Revenue |
| $ Per User |
GR |
| 11,250 |
14,125 |
17,763 |
22,371 |
28,219 |
31,040 |
34,145 |
37,559 |
41,315 |
45,446 |
| $ per month for basic access can be adjusted in cell C7 |
| Basic Users |
| $ 5.00 |
20% |
| 5,000 |
6,000 |
7,200 |
8,640 |
10,368 |
11,405 |
12,545 |
13,800 |
15,180 |
16,698 |
| $ per month for premium access can be adjusted in cell C8 |
| Premium (AI-assisted) Users |
| $ 25.00 |
30% |
| 6,250 |
8,125 |
10,563 |
13,731 |
17,851 |
19,636 |
21,599 |
23,759 |
26,135 |
28,749 |
|
| Revenue Growth |
| 10% |
| NA |
25.6% |
25.8% |
25.9% |
26.1% |
10.0% |
10.0% |
10.0% |
10.0% |
10.0% |
| User Targets |
| Cost of Revenue |
|
| 40% |
| 4,500 |
5,650 |
7,105 |
8,949 |
11,287 |
12,416 |
13,658 |
15,024 |
16,526 |
18,179 |
| 1,000,000 basic access users in 2025 (cannot be altered) |
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| Gross Margin |
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| 6,750 |
8,475 |
10,658 |
13,423 |
16,931 |
18,624 |
20,487 |
22,535 |
24,789 |
27,268 |
| 250,000 AI-assisted users in 2025 (cannot be altered) |
| Operating Expenses |
| Research and Development |
|
| 5% |
| 1,575 |
1,654 |
1,736 |
1,823 |
1,914 |
2,010 |
2,111 |
2,216 |
2,327 |
2,443 |
| Growth rate % for basic users in the first 5 years can be altered in cell D7 |
| Technology and 3rd Party Services |
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| 12% |
| 1,350 |
1,695 |
2,132 |
2,685 |
3,386 |
3,725 |
4,097 |
4,507 |
4,958 |
5,454 |
| Growth rate % for basic users in the first 5 years can be altered in cell D8 |
| Depreciation |
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| 370 |
420 |
473 |
528 |
586 |
646 |
710 |
777 |
847 |
921 |
| Growth rate for both in 2030 and beyond can be altered in cell D9 |
| Total Operating Expenses |
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| 0 |
3,295 |
3,769 |
4,340 |
5,035 |
5,886 |
6,381 |
6,918 |
7,500 |
8,132 |
8,818 |
| Terminal value growth rate can be altered in cell C47 |
| Selling, General & Administrative |
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| 15% |
1,500 |
4,500 |
5,175 |
5,951 |
6,844 |
7,871 |
9,051 |
10,409 |
11,970 |
13,766 |
15,830 |
| Total Direct Expenses |
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| 1,500 |
7,795 |
8,944 |
10,292 |
11,879 |
13,757 |
15,432 |
17,327 |
19,470 |
21,898 |
24,649 |
| Cost of Revenue |
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| Cost of revenue % can be altered in cell D17 |
| Operating Profit |
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| (1,500) |
(1,045) |
(469) |
366 |
1,543 |
3,174 |
3,192 |
3,160 |
3,065 |
2,891 |
2,619 |
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| Operating Profit/Sales |
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| (0.093) |
(0.033) |
0.021 |
0.069 |
0.112 |
0.103 |
0.093 |
0.082 |
0.070 |
0.058 |
| Operating Expenses |
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| SG&A/Sales |
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| 0.400 |
0.366 |
0.335 |
0.306 |
0.279 |
0.292 |
0.305 |
0.319 |
0.333 |
0.348 |
| R&D: 14% of revenue in 2025 (Cannot be altered) |
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| R&D growth rate for 2026 and beyond can be altered in cell D13 |
| Capital Expenditures |
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| 2,500 |
1,200 |
500 |
525 |
551 |
579 |
608 |
638 |
670 |
704 |
739 |
| Tech and 3rd Party Svcs % of revenue can be altered in cell D14 |
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| Growth in capex |
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| -52.0% |
-58.3% |
5.0% |
5.0% |
5.0% |
5.0% |
5.0% |
5.0% |
5.0% |
5.0% |
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| Selling, General & Administrative |
| Net Working Capital Accounts |
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| 2024 |
2025 |
2026 |
2027 |
2028 |
2029 |
2030 |
2031 |
2032 |
2033 |
2034 |
| 40% of revenue in 2025 |
| Cash |
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|
| 500 |
175 |
184 |
193 |
203 |
213 |
223 |
235 |
246 |
259 |
271 |
| SG&A YOY growth rate for 2026 and beyond can be altered in cell D17 |
| Accounts Receivable |
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| 250 |
275 |
303 |
333 |
366 |
403 |
443 |
487 |
536 |
589 |
| Accounts Payable |
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| 317 |
484 |
593 |
640 |
692 |
747 |
807 |
871 |
941 |
1016 |
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| 500 |
108 |
-25 |
-98 |
-105 |
-113 |
-121 |
-129 |
-138 |
-146 |
-155 |
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| (392) |
(133) |
(73) |
(8) |
(8) |
(8) |
(8) |
(9) |
(9) |
(9) |
| NPV Analysis |
| Free Cash Flows |
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| 2024 |
2025 |
2026 |
2027 |
2028 |
2029 |
2030 |
2031 |
2032 |
2033 |
2034 |
| EBIT(1-t) |
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|
| (900) |
(627) |
(281) |
219 |
926 |
1,905 |
1,915 |
1,896 |
1,839 |
1,735 |
1,571 |
| plus depreciation |
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| 370 |
420 |
473 |
528 |
586 |
646 |
710 |
777 |
847 |
921 |
| less DNWC |
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| 392 |
133 |
73 |
8 |
8 |
8 |
8 |
9 |
9 |
9 |
| less capital expenditures |
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| (1,200) |
(500) |
(525) |
(551) |
(579) |
(608) |
(638) |
(670) |
(704) |
(739) |
| Free Cash Flow |
|
|
| (900) |
(1,065) |
(229) |
240 |
910 |
1,919 |
1,962 |
1,976 |
1,955 |
1,887 |
1,763 |
| Terminal value |
| 3.00% |
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| 30,262 |
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| (900) |
(1,065) |
(229) |
240 |
910 |
1,919 |
1,962 |
1,976 |
1,955 |
1,887 |
32,025 |
| Initial Outlays |
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| Capital Expenditures |
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| (2,500) |
| Discount factor |
| 9.00% |
| (3,400) |
(1,065) |
(229) |
240 |
910 |
1,919 |
1,962 |
1,976 |
1,955 |
1,887 |
32,025 |
| Net Present Value |
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| $15,136 |
| IRR Analysis |
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| 2024 |
2025 |
2026 |
2027 |
2028 |
2029 |
2030 |
2031 |
2032 |
2033 |
2034 |
| Cash Flows |
|
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| (3,400) |
(1,065) |
(229) |
240 |
910 |
1,919 |
1,962 |
1,976 |
1,955 |
1,887 |
32,025 |
| IRR |
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| 30.2% |
| Payback Analysis |
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| 2024 |
2025 |
2026 |
2027 |
2028 |
2029 |
2030 |
2031 |
2032 |
2033 |
2034 |
| Cash flows |
|
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| (3,400) |
(1,065) |
(229) |
240 |
910 |
1,919 |
1,962 |
1,976 |
1,955 |
1,887 |
32,025 |
| Cumulative cash flow |
|
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| (3,400) |
(4,465) |
(4,693) |
(4,454) |
(3,544) |
(1,625) |
337 |
2,313 |
4,268 |
6,155 |
38,180 |
| Payback period |
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| 5.83 |
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tbeard23
InvestomaticDCFAnalysis.V2.xlsx
