Year Zero

Year One

Year Two

Year Three

 

 

 

 

 

Revenues

 

$100,000

$1,200,00

$800,000

Costs of Good Sold

 

50,000

600,000

400,000

Gross Profit

 

50,000

600,000

400,000

 

 

 

 

 

Variable Expenses

 

10,000

120,000

80,000

Fixed Expenses

 

30,000

30,000

30,000

Total Expenses

 

40,000

150,000

110,000

Operating Profit/(Loss)

 

10,000

450,000

290,000

Initial Capital Cost

($600,000)

 

 

Cash Flows

($600,000)

10,000

450,000

290,000

20% Discount Rate

1.000

0.913

0.761

0.634

Discounted Cash Flows

($600,000)

$ 9,129

$342,327

$183,842

Cumulative

($600,000)

($590,871)

($248,544)

($64,702)