Quote:
Originally Posted by phrozen06
Is there a financial instrument that does this for you. Like an excel spreadsheet.
I'm doing a feasibility study on a ficticous car company that wants to enter into the ALMS.
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definitely use a spreadsheet to help you. Think about all of the costs that could be involved and separate them into "one-time" and "recurring" expenses. One-time expenses would be up-front costs such as the cost of the vehicles, computer hardware and software, etc. Recurring expenses would include items such as facilities rent and utilities, personnel salaries and benefits, fuel for the cars, and whatever money you have budgeted for development of the car.
set up your spreadsheet to show these costs over regular time intervals, which could be monthly, quarterly, or annual, etc. your upfront costs will likely all occur in the first year, but you could have one-time costs that you incur later on, say 5 years into your project. Recurring costs will hit with regular time intervals, and may go up or down depending on the expense item. if they go up and down, these are variable expenses - try to determine what is driving that cost. for example, fuel cost probably depends on the number of test drives and races that your team will partake in over the given time period. so if it costs you $100 of fuel every time you put the car on the track you would be multiplying the fuel cost times the number of races
hopefully this gets you started. I build a lot of models like this at work so ping me if you need further help