JMAD Consulting Group
JMAD Consulting Group, LLC.
Analysis Performed by Associates: Matt Diminich, Dana Kisenwether, Alec Schnur, & Jaclyn Valentine
For Tiny Tech Company Inc.
EXECUTIVE SUMMARY JMAD Consulting has analyzed your firm’s proposal of entering the market for 3D printers. We have developed our recommendations for you using your initial price and demand projections and expanding them out to year ten of the project. We believe you should move forward with the project because it is profitable. Within the first five years under your projections it will create a net present value of $309,201 dollars, and if your Vice President of Sourcing does manage to decrease variable costs by fifteen percent, the net present value after year five would be $3,434,202, exceeding your goal of 2.5 million dollars. In addition to that, years six through ten greatly increase the value of the project. After using your information to create a time versus price projection based on the best fit exponential equation, we were able to forecast the unit price of your 3D printers up until year 10. With these projections we have determined that the sale of the printers will add $103,225,340 undiscounted net cash flow to your business, which is a net present value of $46,816,270 dollars. We believe you should accept this project proposal because of the value it will add to your firm. In addition, these projections are largely based on your demand growth rate of eight percent. After performing a sensitivity analysis of net cash flow, we found that it is more beneficial for the firm to focus on increasing your demand growth rate versus decreasing your variable costs. The demand has a greater impact on the profit Tiny Tech will receive. The following report and appendices outline and support how we came to our recommendations and results. Please contact JMAD Consulting for any further questions or concerns.
CURRENT SITUATION
Today, technology is changing on a daily basis and it is important for Tiny Tech
Analysis Performed by Associates: Matt Diminich, Dana Kisenwether, Alec Schnur, & Jaclyn Valentine
For Tiny Tech Company Inc.
EXECUTIVE SUMMARY JMAD Consulting has analyzed your firm’s proposal of entering the market for 3D printers. We have developed our recommendations for you using your initial price and demand projections and expanding them out to year ten of the project. We believe you should move forward with the project because it is profitable. Within the first five years under your projections it will create a net present value of $309,201 dollars, and if your Vice President of Sourcing does manage to decrease variable costs by fifteen percent, the net present value after year five would be $3,434,202, exceeding your goal of 2.5 million dollars. In addition to that, years six through ten greatly increase the value of the project. After using your information to create a time versus price projection based on the best fit exponential equation, we were able to forecast the unit price of your 3D printers up until year 10. With these projections we have determined that the sale of the printers will add $103,225,340 undiscounted net cash flow to your business, which is a net present value of $46,816,270 dollars. We believe you should accept this project proposal because of the value it will add to your firm. In addition, these projections are largely based on your demand growth rate of eight percent. After performing a sensitivity analysis of net cash flow, we found that it is more beneficial for the firm to focus on increasing your demand growth rate versus decreasing your variable costs. The demand has a greater impact on the profit Tiny Tech will receive. The following report and appendices outline and support how we came to our recommendations and results. Please contact JMAD Consulting for any further questions or concerns.
CURRENT SITUATION
Today, technology is changing on a daily basis and it is important for Tiny Tech