| Total initial investment | $100 | million |
| Period | 10 | years |
| Project plan 1 |
| leasing of trucks (Estimations) |
| Leasing costs | $750,000 |
| expected returns | $100,000 |
| Period | 9 | years |
| Payback period = cost of the project/annual cash flows |
| payback period = | 7.5 | years |
| The project would be worth undertaking since the payback period is 7.5 years while the project will take 9 years. |
| NPV |
| Assuming required rate of return = | 10% |
| Cash flows | $100,000 |
| Initial investment | $750,000 |
| NPV = | ($174,097.62) |
| The NPV of leasing truck project is negative thsu according to this techniques, it is not profitable to undertake such a project. |
| Project plan 2 |
| Introduction of new trailer parts |
| Assuming required rate of return = | 10% |
| Expected annual cash flows | $850,000 |
| Initial costs | $4,600,000 |
| NPV | $622,882.04 |
| The project is worth undertaking |
| Payback period |
| Expected annual cash flows | $850,000 |
| Initial costs | $4,600,000 |
| Period | 10 | years |
| Payback period = | 5.4117647059 |
| The project should be undertaken. |
| Project plan 3 |
| Starting a new outlet |
| Assuming required rate of return = | 10% |
| Expected annual cash flows | $7,780,000 |
| Initial costs | $38,600,000 |
| NPV | $9,204,732.08 |
| The project is worth undertaking |
| Payback period |
| Expected annual cash flows | $7,780,000 |
| Initial costs | $38,600,000 |
| Period | 10 | years |
| Payback period = | 4.9614395887 |
| The project should be undertaken. |
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copy_of_capital_plan_gp.xlsx
