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Target 5: Net Present Value (NPV) and Internal Rate of Return (IRR)

Financial Target: NPV equal to initial investment, 800,000, at 10% discount rate.


Gaming Method:

Step 1 Baseline.

1. Go to > Business Game > Dynamic analysis > NPV and IRR.

2. Find the NPV and IRR sensitivity at different discount rates.

Step 2 Targets: NPV equal to initial investment, 800,000, at 10% discount rate.

Step 3 Trial and Error Procedure.

Register the new values from January Y1 to December Y2. Find the new values of NPV and IRR. If values of NPV and IRR are less or higher than target, repeat trial.


Management Actions:

5.1 Increase Number of Units.

5.2 Increase Unit Prices.

5.3 Decrease Cost of Licenses.



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