LAUNCH RAMP UP EXPLOITATION EROSION t0=0 t1 t2 t3 t4 BareBonesNPV Calculation

Key Dates (yrs from today) Launch completed, begin Ramp Up Phase (t1):2 Ramp up completed, begin Exploitation Phase (t2):3 Competitive impact, begin Erosion Phase (t3):4 Profits eroded, project End Time (t4):14 TIMING: t0=0 t1 t2 t3 t4 LAUNCH RAMP UP EXPLOITATION EROSION

INVESTMENT: Weighted Average Cost of Capital, annually compounded (%): 25% Launch Phase Invest ($/yr):$500,000 Invest lump sum of ($)$500,000at time (t=)0 Invest lump sum of ($) $1,000,000at time (t=)0.5 Invest lump sum of ($) $2,000,000at time (t=)1.5

OPERATIONS: AFTER RAMP UP PHASE Pay fixed costs at a rate of ($/yr): $7,000, Maximum Demand Rate at end of Ramp Up (units/yr): Variable Production Cost ($/unit): $ Sales Revenue ($/unit): $ To support ongoing demand, at any given time, we must hold this percentage of our annual revenue rate as current assets (%):-- 33%

PROJECT VALUE: Weighted Average Cost of Capital, annually compounded (%): 25% Launch Phase Invest ($/yr):$500,000 Invest lump sum of ($) $500,000at time (t=)0 Invest lump sum of ($) $1,000,000at time (t=)0.5 Invest lump sum of ($) $2,000,000at time (t=)1.5 After Launch Phase Pay fixed costs at a rate of ($/yr): $7,000,000 Maximum Demand Rate at end of Ramp Up (units/yr): Variable Production Cost ($/unit): $150 Sales Revenue ($/unit): $400 To support ongoing demand, at any given time, we must hold this percentage of our annual revenue rate as current assets (%): 33% Total Project Value: $330,867.53

CAPITAL SENSITIVITY: Total Project Value:$(715,635.58) Weighted Average Cost of Capital, annually compounded (%): Was 25% now 30% Launch Phase Invest ($/yr):$500,000 Invest lump sum of ($) $500,000at time (t=)0 Invest lump sum of ($) $1,000,000at time (t=)0.5 Invest lump sum of ($) $2,000,000at time (t=)1.5 After Launch Phase Pay fixed costs at a rate of ($/yr): $7,000,000 Maximum Demand Rate at end of Ramp Up (units/yr): Variable Production Cost ($/unit): $150 Sales Revenue ($/unit): $400 To support ongoing demand, at any given time, we must hold this percentage of our annual revenue rate as current assets (%): 33% Was $331,000 now

Key Dates (yrs from today) was 2 now Begin Ramp Up Phase (t1): 2.5 was 3 now Begin Exploitation Phase (t2): 3.5 Begin Erosion Phase (t3):4 Project End Time (t4):14 Total Project Value: was $331,000 now $(693,652.25) PROJECT DELAY :

Weighted Average Cost of Capital, annually compounded (%): 25% Launch Phase Invest ($/yr):$500, Invest lump sum of ($) $500,000.00at time (t=)0 Invest lump sum of ($) $1,000,000.00at time (t=)0.5 Invest lump sum of ($) $2,000,000.00at time (t=)1.5 After Launch Phase Pay fixed costs at a rate of ($/yr): $7,000, was $331,000 now Maximum Demand Rate Total Project Value: $(1,276,648.74) at end of Ramp Up (units) was 50,000 now45,000 Variable Production Cost ($/unit): $ Sales Revenue ($/unit): $ To support ongoing demand, at any given time, we must hold this percentage of our annual revenue rate as current assets (%): 33% DEMAND SENSITIVITY:

Key Dates (yrs from today) Begin Ramp Up Phase (t1):2 Begin Exploitation Phase (t2):3 WAS 4 now Begin Erosion Phase (t3): 3.5 Project End Time (t4):14 Your Project BareBones NPV: WAS $331,000 now Total Project Value: $(121,567.20) COMPETITIVE RESPONSE: