How to Use This Document

This document includes the Cost & Benefits worksheet and the ROI calculations for the XYZ Energy
Case.
Note all cells in this document are locked to prevent the data from being accidentally edited.

When you are ready to calculate the ROI for your own business case, open the ROI Worksheet
Template to start capturing the numbers for your project.

For more information in the HBR Guide to Building Your Business Case, read:
Chapter 9: Estimate Costs and Benefits
Chapter 10: Calculate ROI

FOUR WAYS TO CALCULATE ROI

Method Answers the question… Expressed in…

How many sales do we

Breakeven
need to recoup the Units sold
Analysis
investment?

How long will it take to

Payback Period Months or years
recoup the investment?

Net Present How much is this project

Dollars
Value (NPV) worth to the business?

What rate of return will

Internal Rate of
this project deliver over Percentage
Return (IRR)
its lifecycle?
sheet and the ROI calculations for the XYZ Energy

ent the data from being accidentally edited.

own business case, open the ROI Worksheet

project.

ding Your Business Case, read:

Typically used for…

Market-focused projects, such as

product development; entrepreneurial
endeavors

Projects with a heavy upfront

investment, such as facilities projects;
productivity projects that accumulate
benefits over time

Projects with large expenditures

Projects that the company reports on

externally, especially those that require
you to borrow money
Costs and Benefits Worksheet: XYZ Energy Case
• A worksheet like this is used to capture costs and benefits before calculating ROI on the subsequ
• On this worksheet, each column represents a calendar year with the first column being the curre
• Costs and benefits (mouse over the red triangle for a quick explanation of categories) are captur
• The total or annual amount is presented in Column F and then costs are spread into appropriate
own document.
• In the Project Investment & Operating Cost categories, project costs are entered as "positive" nu
• In the Project Benefits categories, benefits are entered as "positive" numbers and any off-setting
• Rationales, assumptions and data sources are captured in Column S.
• For more information in the HBR Guide to Building Your Business Case, read Chapter 9: Estima
Project Investment
Capital Expenditures Amount 2013 2014
Combustion Chamber components $ 740,000 $ 123,333
Capitalized System Software
Design $ 170,000 $ 28,333
Development $ 600,000 $ 100,000
Unit Testing $ 400,000 $ 66,667
Turbine Control components $ 675,000 $ 112,500
Total Capital Costs $ 2,585,000
Project Expense (One-time Expense)
System Design $ 500,000 $ 500,000
Combustion Chamber rebuild $ 380,000 $ 100,000 $ 280,000
Turbine Control System Upgrade $ 420,000 $ 150,000 $ 270,000
Integration Testing $ 650,000 $ 650,000
Grid Power $ 800,000 $ 800,000
System Testing $ 1,000,000 $ 1,000,000
Project Support $ 750,000 $ 400,000 $ 350,000
Total Project Expense $ 4,500,000
Total Project Investment $ 7,085,000 $ 1,150,000 $ 3,780,833

Operating Costs (OpEx) Amount 2013 2014

Operating savings (negative costs) -$700,000/yr $ (350,000)
Total Operating Costs $ - $ (350,000)

Project Benefits (amount & timing) Amount 2013 2014

Maintenance Savings $200,000/year $ 100,000
IT Savings $700,000/year $ 350,000
Total Benefits $ - $ 450,000

Annual Total $(1,150,000) $(2,980,833)

Cumulative Total $(1,150,000) $(4,130,833)
culating ROI on the subsequent tabs.
first column being the current year.
on of categories) are captured on this page.
are spread into appropriate years. Make sure to check the estimated total in column F against the summed total in c

are entered as "positive" numbers. The spreadsheet then converts those to costs.
numbers and any off-setting costs as "negative" numbers.
S.
ase, read Chapter 9: Estimate Costs and Benefits.

2015 2016 2017 2018 2019 2020 2021

$ 246,667 $ 246,667 $ 123,333

$ 56,667 $ 56,667 $ 28,333

$ 200,000 $ 200,000 $ 100,000
$ 133,333 $ 133,333 $ 66,667
$ 225,000 $ 225,000 $ 112,500

$ 861,667 $ 861,667 $ 430,833 $ - $ - $ - $ -

2015 2016 2017 2018 2019 2020 2021

$ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000)
$ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000)

2015 2016 2017 2018 2019 2020 2021

$ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000
$ 700,000 $ 700,000 $ 700,000 $ 700,000 $ 700,000 $ 700,000 $ 700,000
$ 900,000 $ 900,000 $ 900,000 $ 900,000 $ 900,000 $ 900,000 $ 900,000

$ 738,333 $ 738,333 $ 1,169,167 $ 1,600,000 $ 1,600,000 $ 1,600,000 $ 1,600,000

$(3,392,500) $(2,654,167) $(1,485,000) $ 115,000 $ 1,715,000 $ 3,315,000 $ 4,915,000
st the summed total in column Q in your

Estimate Rationale
2022 Total
$ 740,000 5 year depreciation starting mid 2014
$ -
$ 170,000
$ 600,000 3 year depreciation starting mid 2014
$ 400,000 3 year depreciation starting mid 2014
$ 675,000 3 year depreciation starting mid 2014
5 year depreciation starting mid 2014

$ 500,000
$ 380,000 Based on Hanover project
$ 420,000 Based on SSP project cost plus 20%
$ 650,000 Revise current Century process
$ 800,000 Based on SSP project cost plus 20%
$ 1,000,000 During 35 day outage
$ 750,000 Test Support $20K/Day;$100K fuel
Proj Mgmt/Purchasing/Travel/Finance
$ - $ 7,085,000

2022 Total
$ (700,000) $ (5,950,000)
$ (700,000) $ (5,950,000) Fuel savings (savings are negative cost)

2022 Total
$ 200,000 $ 1,700,000
$ 700,000 $ 5,950,000 Reduced cumbustor wear
$ 900,000 $ 7,650,000 Reduction of unplanned shutdowns

$ 1,600,000
$ 6,515,000
Breakeven Analysis: XYZ Energy Case
• Entries are auto-populating from the "Cost & Benefits" worksheet.
• Breakeven analysis does not require that the costs and benefits be spread over some number of
years.
• Instructions for calculating are at the bottom of this worksheet.
• For more information in the HBR Guide to Building a Business Case, read the "Breakeven
Analysis" section in Chapter 10: Calculate ROI.

Project Investment
Capital Expenditures Amount
Combustion Chamber components $ 740,000
Capitalized System Software $ -
Design $ 170,000
Development $ 600,000
Unit Testing $ 400,000
Turbine Control components $ 675,000
Total Capital Costs $ 2,585,000
Project Expense (One-time Expense)
System Design $ 500,000
Combustion Chamber rebuild $ 380,000
Turbine Control System Upgrade $ 420,000
Integration Testing $ 650,000
Grid Power $ 800,000
System Testing $ 1,000,000
Project Support $ 750,000
Total Project Expense $ 4,500,000
Total Project Investment $ 7,085,000

Operating Costs (OpEx) Amount

Operating savings (negative costs) -$700,000/yr
Total Operating Costs

Project Benefits (amount & timing) Amount

Maintenance Savings $200,000/year
IT Savings $700,000/year
Total Benefits

There is no sales benefit from this project, therefore it is impossible to calculate the number of unit
sales needed to break even. When there is no sales benefit to a project, a different method for
calculating ROI should be used, such as Payback, NPV, or IRR.
efits" worksheet.
s and benefits be spread over some number of

s worksheet.
g a Business Case, read the "Breakeven

Estimate Rationale

5 year depreciation starting mid 2014

3 year depreciation starting mid 2014

3 year depreciation starting mid 2014
3 year depreciation starting mid 2014
5 year depreciation starting mid 2014

Based on Hanover project

Based on SSP project cost plus 20%
Revise current Century process
Based on SSP project cost plus 20%
During 35 day outage
Test Support $20K/Day;$100K fuel
Proj Mgmt/Purchasing/Travel/Finance

Fuel savings (savings are negative cost)

Reduced cumbustor wear

Reduction of unplanned shutdowns

e it is impossible to calculate the number of unit

s benefit to a project, a different method for
NPV, or IRR.
Type 0 Payback: XYZ Energy Case

• NOTE: For an explanation of the difference between Type 0 and Type 1 Payback calculations, read
Case. Also, please note that only the "Amount" (Column F) data auto-populates from the "Cost & Ben
the first year on the "Cost & Benefits" worksheet.
• The Project column (Column G) contains all of the Project Investment costs no matter how long the
• The Year 1 column should start on the day the project ends and benefits start, and continues for on
the anniversary of the project end date.
• Instructions for calculating the payback period are at the bottom of this worksheet.

Project Investment
Capital Expenditures Amount Project Year 1
Combustion Chamber components $ 740,000 $ - $ 246,667
Capitalized System Software $ -
Design $ 170,000 $ - $ 56,667
Development $ 600,000 $ - $ 200,000
Unit Testing $ 400,000 $ - $ 133,333
Turbine Control components $ 675,000 $ - $ 225,000
Total Capital Costs $ 2,585,000
Project Expense (One-time Expense)
System Design $ 500,000 $ 500,000
Combustion Chamber rebuild $ 380,000 $ 380,000
Turbine Control System Upgrade $ 420,000 $ 420,000
Integration Testing $ 650,000 $ 650,000
Grid Power $ 800,000 $ 800,000
System Testing $ 1,000,000 $ 1,000,000
Project Support $ 750,000 $ 750,000
Total Project Expense $ 4,500,000
Total Project Investment $ 7,085,000 $ 4,500,000 $ 861,667

Operating Costs (OpEx) Amount Project Year 1

Operating savings (negative costs) -$700,000/yr $ (700,000)
Total Operating Costs $ - $ (700,000)

Project Benefits (amount & timing) Amount Project Year 1

Maintenance Savings $200,000/year $ 200,000
IT Savings $700,000/year $ 700,000
Total Benefits $ - $ 900,000

Annual Total $(4,500,000) $ 738,333

Cumulative Total $(4,500,000) $(3,761,667)
To calculate:
1) Find where the Cumulative Total (Row 33) crosses from negative to positive. In this example this
(year 4) plus a fraction of the following year.
2) To determine the fraction, divide the previous year's cumulative total (highlighted in yellow), by the
1,600,000 which equals .43. Then add this fraction to the latest year with a negative Cumulative Tota
e 1 Payback calculations, read the "Payback" section in Chapter 10: Calculate ROI, in the HBR Guide to Building Yo
opulates from the "Cost & Benefits" worksheet. This is because Year 1 on this worksheet does not have the same st

costs no matter how long the project takes to complete.

fits start, and continues for one year (365 days). Each of the following columns should represent one year of benefit,

s worksheet.

Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

$ 246,667 $ 246,667

$ 56,667 $ 56,667
$ 200,000 $ 200,000
$ 133,333 $ 133,333
$ 225,000 $ 225,000

$ 861,667 $ 861,667 $ - $ - $ - $ - $ -

Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

$ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000)
$ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000)

Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

$ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000
$ 700,000 $ 700,000 $ 700,000 $ 700,000 $ 700,000 $ 700,000 $ 700,000
$ 900,000 $ 900,000 $ 900,000 $ 900,000 $ 900,000 $ 900,000 $ 900,000

$ 738,333 $ 738,333 $ 1,600,000 $ 1,600,000 $ 1,600,000 $ 1,600,000 $ 1,600,000

$(3,023,333) $(2,285,000) $ (685,000) $ 915,000 $ 2,515,000 $ 4,115,000 $ 5,715,000
 Payback = 4.43 years

o positive. In this example this is from year 4 to year 5. The payback value is the latest year with a negative Cumulat

(highlighted in yellow), by the annual total of the following year (highlighted in pink). In this example, divide 685,000
th a negative Cumulative Total (year 4). Year 4 + .43 = a payback period of 4.43 years.
 R Guide to Building Your Business
es not have the same start date as

ent one year of benefit, starting on

Estimate Rationale
Year 9 Total
$ 740,000 5 year depreciation starting mid 2014
$ -
$ 170,000 3 year depreciation starting mid 2014
$ 600,000 3 year depreciation starting mid 2014
$ 400,000 3 year depreciation starting mid 2014
$ 675,000 5 year depreciation starting mid 2014

$ 500,000 Based on Hanover project

$ 380,000 Based on SSP project cost plus 20%
$ 420,000 Revise current Century process
$ 650,000 Based on SSP project cost plus 20%
$ 800,000 During 35 day outage
$ 1,000,000 Test Support $20K/Day;$100K fuel
$ 750,000 Proj Mgmt/Purchasing/Travel/Finance

$ - $ 7,085,000

Year 9 Total
$ (700,000) $(6,300,000) Fuel savings (savings are negative cost)
$ (700,000) $(6,300,000)

Year 9 Total
$ 200,000 $ 1,800,000 Reduced cumbustor wear
$ 700,000 $ 6,300,000 Reduction of unplanned shutdowns
$ 900,000 $ 8,100,000

$ 1,600,000
$ 7,315,000
with a negative Cumulative Total

xample, divide 685,000 by

Type 1 Payback: XYZ Energy Case

• NOTE: For an explanation of the difference between Type 0 and Type 1 Payback calculations, read
please note that only the "Amount" data (Column F) auto-populates from the "Cost & Benefits" works
"Cost & Benefits" worksheet.
• The Year 1 column represents one year (365 days) from the start of the project. Each of the followin
than one year, the benefits start in Year 1. If the project lasts longer than one year, some of the proje
occur in Year 1.
• Instructions for calculating the payback period are at the bottom of this worksheet.
• For more information in the HBR Guide to Building a Business Case, read the "Payback" section in

Project Investment
Capital Expenditures Amount Year 1 Year 2
Combustion Chamber components $ 740,000 $ 20,556 $ 246,667
Capitalized System Software $ -
Design $ 170,000 $ 4,722 $ 56,667
Development $ 600,000 $ 16,667 $ 200,000
Unit Testing $ 400,000 $ 11,111 $ 133,333
Turbine Control components $ 675,000 $ 18,750 $ 225,000
Total Capital Costs $ 2,585,000
Project Expense (One-time Expense)
System Design $ 500,000 $ 500,000
Combustion Chamber rebuild $ 380,000 $ 380,000
Turbine Control System Upgrade $ 420,000 $ 420,000
Integration Testing $ 650,000 $ 650,000
Grid Power $ 800,000 $ 800,000
Err:509 $ 1,000,000 $ 1,000,000
Project Support $ 750,000 $ 750,000
Total Project Expense $ 4,500,000
Total Project Investment $ 7,085,000 $ 4,571,806 $ 861,667

Operating Costs (OpEx) Amount Year 1 Year 2

Operating savings (negative costs) -$700,000/yr $ (58,333) $ (700,000)
Total Operating Costs $ (58,333) $ (700,000)

Project Benefits (amount & timing) Amount Year 1 Year 2

Maintenance Savings $200,000/year $ 16,667 $ 200,000
IT Savings $700,000/year $ 58,333 $ 700,000
Total Benefits $ 75,000 $ 900,000

Annual Total $ (4,438,473) $ 738,333

Cumulative Total $ (4,438,473) $ (3,700,139)
To calculate:
1) Find where the Cumulative Total (Row 34) crosses from negative to positive. In this example this i
fraction of the following year.
2) To determine the fraction, divide the previous year's cumulative total (highlighted in yellow), by the
equals .32. Then add this fraction to the latest year with a negative Cumulative Total (year 5). Year 5
ayback calculations, read the "Payback" section in Chapter 10: Calculate ROI, in the HBR Guide to Building Your Bu
"Cost & Benefits" worksheet. This is because Year 1 on this worksheet does not have the same start date as the firs

oject. Each of the following columns represents one year starting on the anniversary of the project start date. If the pr
e year, some of the project investment will be in Year 2. In this case the project was a nine-month project so three mo

ksheet.
the "Payback" section in Chapter 10: Calculate ROI.

Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

$ 246,667 $ 226,111

$ 56,667 $ 51,944
$ 200,000 $ 183,333
$ 133,333 $ 122,222
$ 225,000 $ 206,250

$ 861,667 $ 789,860 $ - $ - $ - $ -

Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

$ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000)
$ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000)

Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

$ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000
$ 700,000 $ 700,000 $ 700,000 $ 700,000 $ 700,000 $ 700,000
$ 900,000 $ 900,000 $ 900,000 $ 900,000 $ 900,000 $ 900,000

$ 738,333 $ 810,140 $ 1,600,000 $ 1,600,000 $ 1,600,000 $ 1,600,000

$ (2,961,806) $ (2,151,666) $ (551,666) $ 1,048,334 $ 2,648,334 $ 4,248,334
 Payback = 5.34 Years

ve. In this example this is from year 5 to year 6. The payback value is the latest year with a negative Cumulative Tot

hlighted in yellow), by the annual total of the following year (highlighted in pink). In this example, divide 551,666 by 1,
ve Total (year 5). Year 5 + .34 = a payback period of 5.34 years.
HBR Guide to Building Your Business Case. Also,
e the same start date as the first year on the

f the project start date. If the project lasts less

nine-month project so three months of benefits

Estimate Rationale
Year 9 Year 10 Total
$ 740,000 5 year depreciation starting mid 2014
$ -
$ 170,000 3 year depreciation starting mid 2014
$ 600,000 3 year depreciation starting mid 2014
$ 400,000 3 year depreciation starting mid 2014
$ 675,000 5 year depreciation starting mid 2014

$ 500,000 Based on Hanover project

$ 380,000 Based on SSP project cost plus 20%
$ 420,000 Revise current Century process
$ 650,000 Based on SSP project cost plus 20%
$ 800,000 During 35 day outage
$ 1,000,000 Test Support $20K/Day;$100K fuel
$ 750,000 Proj Mgmt/Purchasing/Travel/Finance

$ - $ - $ 7,085,000

Year 9 Year 10 Total

$ (700,000) $ (700,000) $(6,358,333) Fuel savings (savings are negative cost)
$ (700,000) $ (700,000) $(6,358,333)

Year 9 Year 10 Total

$ 200,000 $ 200,000 $ 1,816,667 Reduced cumbustor wear
$ 700,000 $ 700,000 $ 6,358,333 Reduction of unplanned shutdowns
$ 900,000 $ 900,000 $ 8,175,000

$ 1,600,000 $ 1,600,000
$ 5,848,334 $ 7,448,334
with a negative Cumulative Total (year 5) plus a

example, divide 551,666 by 1,600,000 which

Net Present Value (NPV): XYZ Energy Case
• Entries are auto-populating from the "Cost & Benefits" worksheet.
• The NPV will automatically calculate and display in cell H34 once the discount rate and number of y
• For more information in the HBR Guide to Building a Business Case, read the "Net Present Value"

Project Investment
Capital Expenditures Amount 2013
Combustion Chamber components $ 740,000 $ -
$ - $ -
$ 170,000 $ -
$ 600,000 $ -
$ 400,000 $ -
Turbine Control components $ 675,000 $ -
Total Capital Costs $ 2,585,000
Project Expense (One-time Expense)
System Design $ 500,000 $ 500,000
Combustion Chamber rebuild $ 380,000 $ 100,000
Turbine Control System Upgrade $ 420,000 $ 150,000
Integration Testing $ 650,000 $ -
Grid Power $ 800,000 $ -
System Testing $ 1,000,000 $ -
Project Support $ 750,000 $ 400,000
Total Project Expense $ 4,500,000
Total Project Investment $ 7,085,000 $ 1,150,000

Operating Costs (OpEx) Amount 2013

Operating savings (negative costs) -$700,000/yr $ -
Total Operating Costs $ -

Project Benefits (amount & timing) Amount 2013

Maintenance Savings $200,000/year $ -
IT Savings $700,000/year $ -
Total Benefits $ -

Annual Total $ (1,150,000)

Discount Rate: 8.0% NPV:

# of years in NPV analysis:

10
select a value between 2 and 10
he discount rate and number of years have been entered in cells E34 & E35.
se, read the "Net Present Value" section in Chapter 10: Calculate ROI.

2014 2015 2016 2017 2018 2019

$ 123,333 $ 246,667 $ 246,667 $ 123,333 $ - $ -
$ - $ - $ - $ - $ - $ -
$ 28,333 $ 56,667 $ 56,667 $ 28,333 $ - $ -
$ 100,000 $ 200,000 $ 200,000 $ 100,000 $ - $ -
$ 66,667 $ 133,333 $ 133,333 $ 66,667 $ - $ -
$ 112,500 $ 225,000 $ 225,000 $ 112,500 $ - $ -

$ - $ - $ - $ - $ - $ -
$ 280,000 $ - $ - $ - $ - $ -
$ 270,000 $ - $ - $ - $ - $ -
$ 650,000 $ - $ - $ - $ - $ -
$ 800,000 $ - $ - $ - $ - $ -
$ 1,000,000 $ - $ - $ - $ - $ -
$ 350,000 $ - $ - $ - $ - $ -

$ 3,780,833 $ 861,667 $ 861,667 $ 430,833 $ - $ -

2014 2015 2016 2017 2018 2019

$ (350,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000)
$ (350,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000)

2014 2015 2016 2017 2018 2019

$ 100,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000
$ 350,000 $ 700,000 $ 700,000 $ 700,000 $ 700,000 $ 700,000
$ 450,000 $ 900,000 $ 900,000 $ 900,000 $ 900,000 $ 900,000

$ (2,980,833) $ 738,333 $ 738,333 $ 1,169,167 $ 1,600,000 $ 1,600,000

$ 2,864,074
 2020 2021 2022 Total
$ - $ - $ - $ 740,000
$ - $ - $ - $ -
$ - $ - $ - $ 170,000
$ - $ - $ - $ 600,000
$ - $ - $ - $ 400,000
$ - $ - $ - $ 675,000

$ - $ - $ - $ 500,000
$ - $ - $ - $ 380,000
$ - $ - $ - $ 420,000
$ - $ - $ - $ 650,000
$ - $ - $ - $ 800,000
$ - $ - $ - $ 1,000,000
$ - $ - $ - $ 750,000

$ - $ - $ - $ 7,085,000

2020 2021 2022 Total

$ (700,000) $ (700,000) $ (700,000) $ (5,950,000)
$ (700,000) $ (700,000) $ (700,000) $ (5,950,000)

2020 2021 2022 Total

$ 200,000 $ 200,000 $ 200,000 $ 1,700,000
$ 700,000 $ 700,000 $ 700,000 $ 5,950,000
$ 900,000 $ 900,000 $ 900,000 $ 7,650,000

$ 1,600,000 $ 1,600,000 $ 1,600,000

 Estimate Rationale

5 year depreciation starting mid 2014

3 year depreciation starting mid 2014

3 year depreciation starting mid 2014
3 year depreciation starting mid 2014
5 year depreciation starting mid 2014

Based on Hanover project

Based on SSP project cost plus 20%
Revise current Century process
Based on SSP project cost plus 20%
During 35 day outage
Test Support $20K/Day;$100K fuel
Proj Mgmt/Purchasing/Travel/Finance

Fuel savings (savings are negative cost)

Reduced cumbustor wear

Reduction of unplanned shutdowns
Internal Rate of Return (IRR): XYZ Energy Case
• Entries are auto-populating from the "Cost & Benefits" worksheet.
• The IRR will automatically calculate and display in cell G34 once the number of years has been ent
• For more information in the HBR Guide to Building a Business Case, read the "Internal Rate of Retu

Project Investment
Capital Expenditures Amount 2013
Combustion Chamber components $ 740,000 $ -
Capitalized System Software $ - $ -
Design $ 170,000 $ -
Development $ 600,000 $ -
Unit Testing $ 400,000 $ -
Turbine Control components $ 675,000 $ -
Total Capital Costs $ 2,585,000
Project Expense (One-time Expense)
System Design $ 500,000 $ 500,000
Combustion Chamber rebuild $ 380,000 $ 100,000
Turbine Control System Upgrade $ 420,000 $ 150,000
Integration Testing $ 650,000 $ -
Grid Power $ 800,000 $ -
System Testing $ 1,000,000 $ -
Project Support $ 750,000 $ 400,000
Total Project Expense $ 4,500,000
Total Project Investment $ 7,085,000 $ 1,150,000

Operating Costs (OpEx) Amount 2013

Operating savings (negative costs) -$700,000/yr $ -
Total Operating Costs $ -

Project Benefits (amount & timing) Amount 2013

Maintenance Savings $200,000/year $ -
IT Savings $700,000/year $ -
Total Benefits $ -

Annual Total $ (1,150,000)

IRR: 21.3%
# of years in IRR analysis:
10
select a value between 2 and 10
x
mber of years has been entered in cell E35.
ad the "Internal Rate of Return" section in Chapter 10: Calculate ROI.

2014 2015 2016 2017 2018 2019 2020

$ 123,333 $ 246,667 $ 246,667 $ 123,333 $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ -
$ 28,333 $ 56,667 $ 56,667 $ 28,333 $ - $ - $ -
$ 100,000 $ 200,000 $ 200,000 $ 100,000 $ - $ - $ -
$ 66,667 $ 133,333 $ 133,333 $ 66,667 $ - $ - $ -
$ 112,500 $ 225,000 $ 225,000 $ 112,500 $ - $ - $ -

$ - $ - $ - $ - $ - $ - $ -
$ 280,000 $ - $ - $ - $ - $ - $ -
$ 270,000 $ - $ - $ - $ - $ - $ -
$ 650,000 $ - $ - $ - $ - $ - $ -
$ 800,000 $ - $ - $ - $ - $ - $ -
$ 1,000,000 $ - $ - $ - $ - $ - $ -
$ 350,000 $ - $ - $ - $ - $ - $ -

$ 3,780,833 $ 861,667 $ 861,667 $ 430,833 $ - $ - $ -

2014 2015 2016 2017 2018 2019 2020

$ (350,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000)
$ (350,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (700,000)

2014 2015 2016 2017 2018 2019 2020

$ 100,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000
$ 350,000 $ 700,000 $ 700,000 $ 700,000 $ 700,000 $ 700,000 $ 700,000
$ 450,000 $ 900,000 $ 900,000 $ 900,000 $ 900,000 $ 900,000 $ 900,000

$ (2,980,833) $ 738,333 $ 738,333 $ 1,169,167 $ 1,600,000 $ 1,600,000 $ 1,600,000

 Estimate Rationale
2021 2022 Total
$ - $ - $ 740,000 5 year depreciation starting mid 2014
$ - $ - $ -
$ - $ - $ 170,000 3 year depreciation starting mid 2014
$ - $ - $ 600,000 3 year depreciation starting mid 2014
$ - $ - $ 400,000 3 year depreciation starting mid 2014
$ - $ - $ 675,000 5 year depreciation starting mid 2014

$ - $ - $ 500,000 Based on Hanover project

$ - $ - $ 380,000 Based on SSP project cost plus 20%
$ - $ - $ 420,000 Revise current Century process
$ - $ - $ 650,000 Based on SSP project cost plus 20%
$ - $ - $ 800,000 During 35 day outage
$ - $ - $ 1,000,000 Test Support $20K/Day;$100K fuel
$ - $ - $ 750,000 Proj Mgmt/Purchasing/Travel/Finance

$ - $ - $ 7,085,000

2021 2022 Total

$ (700,000) $ (700,000) $ (5,950,000) Fuel savings (savings are negative cost)
$ (700,000) $ (700,000) $ (5,950,000)

2021 2022 Total

$ 200,000 $ 200,000 $ 1,700,000 Reduced cumbustor wear
$ 700,000 $ 700,000 $ 5,950,000 Reduction of unplanned shutdowns
$ 900,000 $ 900,000 $ 7,650,000

$ 1,600,000 $ 1,600,000