plan

Original Plan
Breakdown:

Sale price of £34,000 (£34,999):

£17,500 will be available for sales markup (£500 for us).

£17,000 will be production cost (parts), which will break down thus:

£11,000 will be for the battery technology,

£3,000 for drive motors,

£3,000 for chassis, body, fittings, mechanics and electrics and electronics.

Return on investment:

Each vehicle profits us by £500 (from our wholesale markup)

We invest £50,000 in marketing each year except the final year.

We manufacture and sell 200 vehicles per year (1 per day (5 day week) for 40 weeks).

Notes: This will need 10 workers per vehicle

10 workers @ £10,000/year(initial) = £100,000 salary per 200 cars.

or £500 per car

This is added on to the base cost of the vehicle to make the production cost (parts & labour) £17,500.

Year 1:

Research Investment: -£40,000 (IP) - £500,000 (prototype) = -£540,000

Profit: -£540,000

Year 2:

-£1,000,000 (production) - £540,000(CF) = -£1,540,000

Profit:-£1,540,000

Year 3:

Sales: 200 * £500 = £1,000,000

Marketing Investment: £50,000

Profit: £1,000,000 - £50,000 - £1,540,000(CF) = -£590,000

Year 4:

Sales: 200 * £500 = £1,000,000

Marketing Investment: £50,000

Profit: £1,000,000 - £50,000 - £590,000(CF) = £360,000

Year 5:

Sales: 200 * £500 = £1,000,000

Marketing Investment: £50,000

Profit: £1,000,000 - £50,000 + £360,000(CF) = £1,310,000

Year 6:

Sales: 200 * £500 = £1,000,000

Marketing Investment: £50,000

Profit: £1,000,000 - £50,000 + £1,310,000(CF) = £2,260,000

Year 7:

Sales: 200 * £500 = £1,000,000

Profit: £1,000,000 + £2,260,000(CF) = £3,260,000