Option 1 Add Capacity
Year 0
Demand 10000 Discount Rate 0
Selling Price 15000
Cost 8500
Profit 65000000
Fixed Cost 100000000
NPV 183400000
Year 1
Probability 0.8 Probability 0.2
Demand 15000 Demand 10000
Selling Price 15000 Selling Price 15000
Cost 8500 Cost 8500
Profit 97500000 Profit 65000000
NPV 234000000 NPV 156000000
Year 2
Probability 0.8 Probability 0.2 Probability 0.8 Probability 0.2
Demand 22500 Demand 15000 Demand 15000 Demand 10000
Selling Price 15000 Selling Price 15000 Selling Price 15000 Selling Price 15000
Cost 8500 Cost 8500 Cost 8500 Cost 8500
Profit 146250000 Profit 97500000 Profit 97500000 Profit 65000000
NPV 146250000 NPV 97500000 NPV 97500000 NPV 65000000
Option 2 Use Molectron Discount Factor 1
Year 0
Demand 10000
Selling Price 15000
Molectron Price 2000
Raw Material Cost 8000
Profit 50000000
NPV 214080000
Year 1
Probability 0.8 Probability 0.2
Demand 15000 Demand 10000
Selling Price 15000 Selling Price 15000
Molectron Price 2000 Molectron Price 2000
Raw Material Cost 8000 Raw Material Cost8000
Profit 75000000 Profit 50000000
NPV 175800000 NPV 117200000
Year 2
Probability 0.4 Probability 0.1 Probability 0.4 Probability 0.1 Probability 0.4 Probability 0.1 Probability 0.4 Probability 0.1
Demand 22500 Demand 15000 Demand 22500 Demand 15000 Demand 15000 Demand 10000 Demand 15000 Demand 10000
Selling Price 15000 Selling Price 15000 Selling Price 15000 Selling Price 15000 Selling Price 15000 Selling Price 15000 Selling Price 15000 Selling Price 15000
Molectron Price 2400 Molectron Price 2400 Molectron Price 2000 Molectron Price 2000 Molectron Price 2400 Molectron Price 2400 Molectron Price 2000 Molectron Price 2000
Raw Material Cost 8000 Raw Material Cost8000 Raw Material Cost 8000 Raw Material Cost8000 Raw Material Cost 8000 Raw Material Cost
8000 8000
Raw Material Cost 8000
Raw Material Cost
Profit 103500000 Profit 69000000 Profit 112500000 Profit 75000000 Profit 69000000 Profit 46000000 Profit 75000000 Profit 50000000
NPV 103500000 NPV 69000000 NPV 112500000 NPV 75000000 NPV 69000000 NPV 46000000 NPV 75000000 NPV 50000000
Option 1 Parts4u.com Discount Factor 1.2
Year 0
Spending 150000000
275132813
NPV of Total Cost
Year 1
Probability 0.75 Probability 0.25
Spending 150000000 Spending 135000000
Commission 157500000 Commission 141750000
282187500
NPV of Total Cost 253968750
NPV of Total Cost
Year 2
Probability 0.5 Probability 0.5 Probability 0.5 Probability 0.5
Spending 150000000 Spending 135000000 Spending 135000000 Spending 121500000
Commission 157500000 Commission 141750000 Commission 141750000 Commission 127575000
157500000
NPV of Total Cost 141750000
NPV of Total Cost 141750000
NPV of Total Cost 127575000
NPV of Total Cost
Option 2 AllMRO.com Discount Factor 1.2
Year 0
Spending 150000000
10000000
Up-front Payment
274651563
NPV of Total Cost
Year 1
Probability 0.75 Probability 0.25
Spending 150000000 Spending 135000000
Commission 151500000 Commission 136350000
271437500
NPV of Total Cost 244293750
NPV of Total Cost
Year 1
Probability 0.5 Probability 0.5 Probability 0.5 Probability 0.5
Spending 150000000 Spending 135000000 Spending 135000000 Spending 121500000
Commission 151500000 Commission 136350000 Commission 136350000 Commission 122715000
151500000
NPV of Total Cost 136350000
NPV of Total Cost 136350000
NPV of Total Cost 122715000
NPV of Total Cost
Option 1 MultiChem Discount Factor 1.2
Year 0
NPV 150938.1
Year 1
Probability 0.75 Probability 0.25
Sales 110000 Sales 100000
Raw Material Price1.2 Raw Material Price1.2
Total Cost 132000 Total Cost 120000
123750.8
NPV of Total Cost 232500
NPV of Total Cost
Year 2
Probability 0.75 Probability 0.25 Probability 0.75 Probability 0.25
Sales 132000 Sales 99000 Sales 120000 Sales 90000
Raw Material Price1.2 Raw Material Price1.2 Raw Material Price1.2 Raw Material Price1.2
Total Cost 158400 Total Cost 118800 Total Cost 144000 Total Cost 108000
NPV 158400 NPV 118800 NPV 144000 NPV 108000
Option 2 Mixemat Discount Factor 1.2
Year 0
NPV 288082
Year 1
Probability 0.5625 Probability 0.1875 Probability 0.1875 Probability 0.0625
Sales 110000 Sales 100000 Sales 110000 Sales 100000
High
Raw Material Demand High
Raw Material Demand Low
Raw Material Demand Low
Raw Material Demand
from Mixemat
Amount Bought 90000 from Mixemat
Amount Bought 90000 110000
Amount Bought from Mixemat 100000
Amount Bought from Mixemat
81000
Money paid to Mixemat 81000
Money paid to Mixemat 99000
Money paid to Mixemat 90000
Money paid to Mixemat
80000
Money paid to spot market 40000
Money paid to spot market Total Cost 99000 Total Cost 90000
Total Cost 161000 Total Cost 121000 NPV 257203.1 NPV 217968.8
NPV 319203.1 NPV 248968.8
Year 2
Probability 0.5625 Probability 0.1875 Probability 0.1875 Probability 0.0625 Probability 0.5625 Probability 0.1875 Probability 0.1875 Probability 0.0625 Probability 0.5625 Probability 0.1875 Probability 0.1875 Probability 0.0625 Probability 0.5625 Probability 0.1875 Probability 0.1875 Probability 0.0625
Sales 132000 Sales 99000 Sales 132000 Sales 99000 Sales 120000 Sales 90000 Sales 120000 Sales 90000 Sales 132000 Sales 99000 Sales 132000 Sales 99000 Sales 120000 Sales 90000 Sales 120000 Sales 90000
High
Raw Material Demand High
Raw Material Demand Low
Raw Material Demand Low
Raw Material Demand Raw Material Demand
High High
Raw Material Demand Low
Raw Material Demand Low
Raw Material Demand Raw Material Demand
High High
Raw Material Demand Low
Raw Material Demand Low
Raw Material Demand Raw Material Demand
High High
Raw Material Demand Low
Raw Material Demand Low
Raw Material Demand
from Mixemat
Amount Bought 90000 from Mixemat
Amount Bought 90000 132000
Amount Bought from Mixemat from Mixemat
Amount Bought 99000 Amount Bought 90000
from Mixemat from Mixemat
Amount Bought 90000 120000
Amount Bought from Mixemat from Mixemat
Amount Bought 90000 Amount Bought 90000
from Mixemat from Mixemat
Amount Bought 90000 132000
Amount Bought from Mixemat from Mixemat
Amount Bought 99000 Amount Bought 90000
from Mixemat from Mixemat
Amount Bought 90000 120000
Amount Bought from Mixemat from Mixemat
Amount Bought 90000
81000
Money paid to Mixemat 81000
Money paid to Mixemat Mixemat
Money paid to 118800 89100
Money paid to Mixemat Money paid to Mixemat
81000 81000
Money paid to Mixemat Mixemat
Money paid to 108000 81000
Money paid to Mixemat Money paid to Mixemat
81000 81000
Money paid to Mixemat Mixemat
Money paid to 118800 89100
Money paid to Mixemat Money paid to Mixemat
81000 81000
Money paid to Mixemat Mixemat
Money paid to 108000 81000
Money paid to Mixemat
spot market
Money paid to 168000 36000
Money paid to spot market Total Cost 118800 Total Cost 89100 Money paid to 120000
spot market 0
Money paid to spot market Total Cost 108000 Total Cost 81000 Money paid to 168000
spot market 36000
Money paid to spot market Total Cost 118800 Total Cost 89100 Money paid to 120000
spot market 0
Money paid to spot market Total Cost 108000 Total Cost 81000
Total Cost 249000 Total Cost 117000 NPV 118800 NPV 89100 Total Cost 201000 Total Cost 81000 NPV 108000 NPV 81000 Total Cost 249000 Total Cost 117000 NPV 118800 NPV 89100 Total Cost 201000 Total Cost 81000 NPV 108000 NPV 81000
NPV 249000 NPV 117000 NPV 201000 NPV 81000 NPV 249000 NPV 117000 NPV 201000 NPV 81000