Hello, Guest   |   Login here

Target 2: Payback (Recover Initial Capital)

Financial Target: Payback at End of Year 2


Gaming Method:

1. Find reduction of capital in December Y2 in the Business Simulation Game > Group 2 > Balance Sheets.

2. Calculate the additional number of units, or additional increase in unit price, or decrease in cost per license over the baseline case, using the 'unit contribution per license: unit contribution = unit price less unit purchase cost'. Subsequently divide the reduction of capital by this amount to obtain the increase of licenses to be sold.

3. Distribute the total increased number of licenses, increased price or decreased cost thus found on the Cash Flows until December Y2.

4. Having done this verify if Equity in December Y2 in the Balance Sheet Year 2 at least equals the initial Capital.

5. Interpret and discuss the outcome.


Management Actions:


2.1. Increase Number of Units.


2.2. Increase Unit Prices.


2.3. Decrease Cost of Licenses.


Examples of Payback Target.



Subscribe today and learn the fundamentals

Hello,
It seems you don't have access to the exclusive content of The Course.

In order to gain access to the content of The Course you will have to register with EntreprenAble. Membership with EntreprenAble will also give you access to our interactive Business Game and Accounting Simulations.

Subscribe today and get:

  • Unlimited website access to The Course
  • Optimized view for Desktop, Tablet and Mobile devices
  • Free 7-day, no obligation trial - normally £15
Start free trial
Test-drive the system for free