CVPSales price per unit$75.00Variable Cost per unit$67.00Fixed C.docx

CVPSales price per unit$75.00*Variable Cost per
unit$67.00*Fixed Cost$100,000.00*Targeted Net
Income$0.00*(assume 0 if you want to calculate
breakeven)Calculated Volume12,500calculated* inputted by
userBreak-Even Point=$100,000/$75-$67=$100,000/$8=12,500
unitsInternal Rate of
Return0=937,500+937,500(1+IRR)0=937,500+937,500+937,500
IRR0=1,875,000+937,500IRR937,500IRR=-1,875,000IRR=-
2%Net Present ValueNPV=-937,500+(75*12,500) (1-
2%)=937,500+937,500(1-0.02)=937,500+918750=1,856,250
MS6010 Course Project Guidelines
Your course project will consist of a 15–20-slide Microsoft
PowerPoint presentation. These slides will help you present
your investment idea to the President and CEO of the public
company. As such, the slides must be well crafted to help
convince the leader of the company of the need for the
investment, the possible risks, and potential returns. Remember,
the slides should outline the key points to be made and not
overwhelm the viewer with too many details. You will provide
the details in the speaker notes for each slide. The slide
presentation must include:
1. Cover page listing the company, project, date, and presenter.
2. Sufficient background so that a potential investor understands
the business.
3. The investment idea and summary justification.
4. Enough historic data from the worksheet you develop in
Modules 3 and 4 to give an investor an understanding of
revenues, costs, expenses, cash flows, and potential returns in
dollars and using capital budgeting analysis concepts to
demonstrate viability.

5. The break-even of the project.
6. Your final analysis summary that details why the company
should invest the money in this project.
7. Speaker notes in your Microsoft PowerPoint presentation to
include background information that you would communicate
verbally in a presentation. This speaker notes content should be
the length necessary to explain the outline presented in the
slides. Each slide must have the requisite speaker notes to
explain the material/data presented in the slides as if you are
making a formal presentation and expect to verbalize those
words.
This slide presentation is due before the end of class on Day 5
of Module 5 and is worth 25% of your course final grade or 250
points. Combined with the other submitted elements of the
project, the total points allocated to this course project will be
500 points or 50% of your grade. The grading of this project
will be extensive to match the percentage of course grade. Make
sure you provide substantial work in the creating of this project.
Breakdown of Course Project Work
Module
Major Task
Points
1
Select public company and begin planning project.
2
Seek approval of the company, project investment idea, and
justification by completing the Project Approval Input in the
link provided.
30

3
Begin working on the Excel worksheet provided with the project
to outline the revenues, costs, expenses, and resulting cash
flows.
4
Submit the final Excel worksheet showing all data and
calculations.
5
Submit Microsoft PowerPoint presentation complete with
speaker notes before the end of class Day 4.
470
Grading Criteria
Assignment Components
Proficient
Max Points
By end of Module 2, complete the Project Approval Input and
answer the questions provided.
Selects US public company and provides name and stock
symbol. Explains interest in the company and in the investment
project.
30
Excel Worksheet Requirements:
Identify the various revenues, expenses, costs, expenses, and
cash flows. If a manufacturing company and investment deals
with projects, the analysis breaks down costs into fixed and
variable, direct and indirect.
All costs, revenues, expenses, and cash flows required to
implement the project are identified, listed, and summed
appropriately
180

Calculate the CVP or break-even point for the project.
Calculations are complete and accurate.
15
Calculate NPV and IRR. Provides the numeric viability of the
project investment.
Calculations are complete and accurate.
25
Slide Presentation Requirements:
Includes a minimum of 15 slides
Each slide is formatted consistently with proper spelling and
grammar.
30
Cover page
Cover page listing the company, project, date, and presenter
10
Company summary
Sufficient written background so that a potential investor
understands the business.
40
Data from Excel Worksheet
Enough historic data from the graded worksheet to give an
investor an understanding of revenues, costs, expenses, cash
flows, and potential returns in dollars and using capital
budgeting analysis concepts to demonstrate viability.
30
Analysis slides
Present the breakeven and other types of analysis for the
project.
50
Final recommendations
Provide your final analysis summary that details why the
company should invest the money in this project.

40
Speaker notes on each slide
Speaker notes in your PowerPoint presentation to include
background information that you would communicate verbally
in a presentation. This background information should be the
length necessary to explain the outline presented in the slides.
Each slide must have the requisite speaker notes to explain the
material/data presented in the slides as if you are making a
formal presentation and expect to verbalize those words.
50
Total:
500
Business Investment Proposal
By :
Jan, 16 2017
Company SummaryDr. Pepper Snapple Group is a beverage
companyThe beverage production is categorized into two, that
is: Non-carbonated soft drinks and Carbonated soft drinksIt key
business activities involve production, marketing and supply
Dr. Pepper Snapple Group, Inc. is soft drink Company based in
the United States, and it focuses on the production, marketing,

and supply of soft drinks.
The company’s beverage products are categorized in two, the
non-carbonated soft drinks and the carbonated beverages that
are flavored.
company operates in three segments for it to be able to meet its
customers’ demands.
*
Cont.This company is made up of three Key departmentsSoft
drinks concentrates departmentPackaging departmentLatin
American soft drinks departmentAll of these departments work
interdependently to achieve mass production
The first segment, the beverage concentrates is accountable for
production and sale of the carbonated beverages among other
branded syrups and concentrates
The second section which is the packaging segment is
responsible for production and distribution of the packaged soft
drinks among other products through the direct delivery system
to the retail outlets.
The third portion focuses on producing and supplying syrups,
concentrates and finished soft drink products.
*
Cont.Dr. Pepper Snapple Group Company currently holds 14.7%
of market sharesThis performance places our company at third
place after Pepsi-ColaPepsi-Cola performs better with about
35.3% of market shares
Dr. Pepper Snapple Group, Inc. holds a market share of 14.7%

positioning it in the third place after Pepsi-Cola which has
35.3% of its market share.
Dr. Pepper Snapple Group, Inc. has defined its briefcase
efficiently through concentrating on their sales and marketing
resources.
The company’s marketing strategy will enable the organization
to focus on the various market analyses which will allow the
company to identify the impact the critical brands produced and
how they could improve them to gain a more significant market
share
*
Market Achievement Analysis This Company has achieved 90%
success80% of potential customers fully satisfiedThe least
weight loss of an average is described in the market structure
graph (below)
This new Investment project produces beverages that have been
successful according to a recent research study. 90% of the
users have been able to lose at least 15 pounds where 80% of
them have been able to maintain the weight outcome. The
advantage that we have is that this company has been able to
secure its public relation through its success making it easier to
adapt to our level of competence. The weight loss is a mark of
success of achieving the zero sugar objective – that enhances
the inorganic and organic beverages
*
The market demand structure

Through the information gathered from the market, analysis
sources show that the company expense will not be affected
because the products that the targeted population need are not
new products in the market. Also through the third-party
distribution plan and the increase of the in-store activity
contributes significantly to minimizing the cost of the
advertisement.
Supplies on the other hand are more when the prices are higher.
This means that it will be Wanda’s wish to make more sales at
higher prices, though this is not the case in her speculations.
The increase in supply at high price is disadvantaged by the
decreasing demand from her products. This then leads to a
condition whereby she will always be having surpluses
(producing much than she should). Therefore, from this point of
reasoning it is advisable that she reduces her selling price and
successively increase her sales and maximize her profits at sales
per unit demand rather than sales per unit price.
*
Five Year Income Statement20132014201520162017Sales
($)Beverage A213,721359,756478,992697,768896,755Beverage
B290,314351,074467,978599,654901,715Total
Sales504,035710,830946,9701,297,4221,798,470Cost of
Sales208,714390,405500,750703,960900,000Gross
Profit295,321320,425446,220593,462898,470Operating Cost
($)Advertisement
20,50020,50020,50020,50050,000Labour75,00075,00080,00085,
000100,000Transportation50,00050,00065,00070,00075,000Tota
l Op. Cost145,500145,500165,500175,500215,000

Breakeven Analysis
IRR = (NPV) 0 = P0 + P1/(1+IRR) + P2/(1+IRR)2 +
P3/(1+IRR)3 + . . . +Pn/(1+IRR)n
0=937,500+937,500(1+IRR)
0=937,500+937,500+937,500IRR
0=1,875,000+937,500IRR
937,500IRR=-1,875,000
IRR=-2%
The break-even point is calculated by comparing the amount of
units that have to be sold in order to cover for the fixed and
variable costs. In the case of Dr. Pepper Snapple Group, Inc, the
break-even point analysis will be based on the number of units
that the company has to sell in order to cover for all expenses.
*

Cont.NPV = 937,500+(75*12,500) (1-2%)
=937,500+937,500(1-0.02)
=937,500+918750
=1,856,250Break-even point in units= Fixed
Costs/(Sales price per unit-variable cost per unit)
=$100,000/$75-$67
=$100,000/$8
=12,500 units
From the above calculation, there is an indication that the
company has to take part in the production, sales and supply
activities after this Investment is made. The initial investment
capital is regained after the sales of 12, 500 units of beverages
each of which are selling at equal sales price.
*
Market Plan AnalysisBegins with understanding the market –
get to know taste and preferenceGet familiar with consumption
trends – in seasons and eventsHave multiple sources of
incomeClearly identify line of productionProject targeted
population size for planning purposesHave a clear budget
To have an accurate and relevant marketing plan there should be
a complete understanding of the market that is targeted by the
business. This will help in noticing taste and preference of the
potential customers. This will also help in getting familiar with
the trend of consumption and which is more helpful in knowing
what is consumed when? And in what quantity. This also helps
in controlling surplus production that will require another

facility like warehouse which increases cost of production.
*
Cont.
Marketing plan needs an analysis of the strengths, weaknesses,
opportunities and threats of the firm, market, industry,
competition available and the immediate environment. It also
needs clearly stated objectives together with the strategies to be
used in achieving them. An action plan will help with the ease
of flow of activities and forecasting will help in avoiding over
expenditure or under expenditure which aids in controlling the
whole system of marketing.
*
Location Analysis
The location of a company ought to be conventional in
consideration of its general business policy. Therefore, in the
case where an organization yearns to take part in leadership
under connectivity models, the organization has to bear in mind
putting in place storage facilities and branches in areas with
coherence to its management strategy and that of their potential
consumers. It is advisable that every business managers together
with their employees to usually have information on how to
located new businesses elsewhere this will help that
organization avoid null pieces of advice.
*

Cost of Current Equity
Merits
DemeritsThere is no need to repayThe risks experienced is
lowEvery stock sold for different shareholders means diffusion
of ownershipIt experiences greater expenses
When you use equity capital, you have no obligation to make
interest payments or to repay equity investors’ initial
investment. Debt capital, on the other hand, requires periodic
interest payments and repayment of the borrowed principal. In
general, a business that uses more equity than debt has a lower
risk of bankruptcy. If a business suffers a setback and fails to
make its interest payments, its creditors can force it into
bankruptcy.With every share of stock you sell to investors, you
dilute, or reduce, your ownership stake in your small business.
Because equity investors typically have the right to vote on
important company decisions, you can potentially lose control
of your business if you sell too much stock.Although equity
does not require interest payments, it typically has a greater
overall cost than debt capital. Stockholders shoulder more risk
from their perspective compared to creditors because they are
last in line to get paid if the company goes bankrupt
*
WACCWeighted Average Capital Cost
(1-Tc) x Rd x E/V x (d/v) + Re
= 8.5(1-40%) x 24.6/(24.6+82) + 82/(24.6 +82) x 13.34
=1.176 +10.26
= $11.446

Weighted average cost of capital (WACC) is the average after-
tax cost of a company’s various capital sources, including
common stock, preferred stock, bonds and any other long-term
debt. A company has two primary sources of financing - debt
and equity - and, in simple terms, WACC is the average cost of
raising that money. WACC is calculated by multiplying the cost
of each capital source (debt and equity) by its relevant weight,
and then adding the products together to determine the WACC
value.
*
ROI AnalysisMeasure of Rate of ReturnsRate of returns from a
project can be measured in two different ways; by using single
period calculation or by multiple period calculations. The rate
of return involves the overall measurer of whether the
investments made in the business are profitable or not. In this
project we can measure the rate of re turns using the data in the
table.Single periodReturn (R) = Vf - Vi ; rate of returns (r) =
R/t ViWhere; Vf is the current value, that
involves interest, Vi is the former value and t is a
given period of time.
Multiple period =
Planned susceptible access of financial data that will aid in
auditing process
Develop proper marketing criteria to increase awareness and
sales volume
Endorse innovation and creativity
CONCLUSION:
Generally, a proposal for a project in an organisation can be
affected by both internal factors of the organisation like

insufficient funds and external factors like explained briefly
above. Since the above project has proved to be profitable
despite the heavy investments, I qualify it for trial having
studied both outcomes over time.
*
Cont.
The calculation of the period of returns (PB) & the Net present
Value
Return period = Starting Input
period of flow of cash
Total Investments = $900,000Period of flow of cash =
($800,000/5) =$160,000
= $900,000/$160,000 = 5.626 yrs
NPV= Total Input+ flow of cash/(1+rate of cash flow)=
142857.17 + 128000 + 114286 + 101910.89 + 90909.1 +
81218.3= 659181.46 – 400000 = $259181.46
RecommendationFollowing the above analysis, there is
consideration of the fact that:This business proposal is likely to
produce twice as much return of 2017 in after five years of
InvestmentsAs the financial analyst and business advisor of this
company, I confidently recommend the funding of the new
Investment project that will cost $900,000.The disbursement of
this cash will be done in phases depending on the project
schedule to avoid elapse of cash flow.
References
Miles, J. A., & Ezzell, J. R. (2010). The weighted average cost
of capital, perfect capital markets, and project life: a

clarification. Journal of Financial and Quantitative Analysis,
15(03), 719-730.
Arditti, F. D., & Levy, H. (2013). The weighted average cost of
capital as a cut off rate: a critical analysis of the classical
textbook weighted average. Financial management, 24-34.
Pricing, I., & Tribunal, R. (2012). Weighted average cost of
capital. Zimmerer, T., Scarborough, N. M., & Wilson, D.
(2005). Essentials of entrepreneurship and small business
management. Pearson/Prentice Hall.
Hodgetts, R. M., Kuratko, D. F., & Kuratko, D. F. (1998).
Effective small business management. Fort Worth: Dryden
Press.
Pratt, S. P., Reilly, R. F., & Schweihs, R. P. (2000). Valuing a
business (p. 45). McGraw-Hill Companies.
Higgins, R. C. (2012). Analysis for financial management.
McGraw-Hill/Irwin.
Breakeven AnalysisBreakeven AnalysisEnter your company
name hereCost DescriptionFixed Costs ($)Variable Costs
(%)Mixed CostsVariable CostsThese costs go in both the fixed
and variable columns. Use dollars in fixed and a percentage in
variable.Cost of Goods Sold45.0%Inventory0.0%Raw
Materials0.0%Direct Labor (Includes Payroll Taxes)0.0%Fixed
CostsSalaries (includes payroll taxes)$ 2,000Supplies$
1,000Repairs & maintenance$ 3,000Advertising$ 250Car,
delivery and travel$ 750Accounting and legal$ 250Rent$
3,0001.0%Telephone$ 500Utilities$ 600Insurance$
800Taxes (Real estate, etc.)$ -Interest$ -Depreciation$ -
Other (specify)$ -Other (specify)$ -Miscellaneous expenses$
-Principal portion of debt payment$ -Owner's draw$
2,000Total Fixed Costs$ 14,150Total Variable
Costs46.0%Enter your sales units100Breakeven Sales level
=26204Breakeven Sales in Units262Some of the material has
been sourced from: http://www.score.org/downloads/Break-
Even%20Analysis1.xls

Total will be calculated automatically.
Fixed costs are only those costs that stay the same even when
unit sales changes. Not all of these items in this list will be
fixed for your particular case. Each one needs to be evaluated.
Variable costs are only those costs that change in equilevant
terms when sales units change. Not all of these items in this list
will be fixed for your particular case. Each one needs to be
evaluated. If you use CGS, you will not use the other three.
Change titles if needed. Enter the percent of sales.
These costs are a combination of both variable and mixed. For
example your cell phone bill has a monthly rent that never
changes and a price per minute for usage.
Cost Volume Profit (CVP) analysis allows you to determine
how changes in costs, changes in the units(volume), changes in
sales or sales units, or changes in variable cost effect the
overall profit of the company. Using this model you can adjust
these items and see the result on breakeven.
Breakeven AnalysisBreakeven AnalysisYou can use this
template or the one I provided in the discussion area for your
projectEnter your company name hereCost DescriptionFixed
Costs ($)Variable Costs (%)Variable CostsCost of Goods
Sold0.0%Inventory0.0%Raw Materials0.0%Direct Labor
(Includes Payroll Taxes)0.0%Fixed CostsSalaries (includes
payroll taxes)$ -Supplies$ -Repairs & maintenance$ -
Advertising$ -Car, delivery and travel$ -Accounting and
legal$ -Rent$ -Telephone$ -Utilities$ -Insurance$ -Taxes
(Real estate, etc.)$ -Interest$ -Depreciation$ -Other
(specify)$ -Other (specify)$ -Miscellaneous expenses$ -
Principal portion of debt payment$ -Owner's draw$ -Total
Fixed Costs$ -Total Variable Costs0.0Breakeven Sales level
=0Source: http://www.score.org/downloads/Break-
Even%20Analysis1.xls

Breakeven Sales Level =
Total Fixed Expenses/ ((100-Total Variable Exp%)/100)
Instructions
Note: You may want to print this information to use as
reference later. To delete these instructions, click the border of
this text box and then press the DELETE key.
Using figures from your Profit and Loss Projection, enter
expected annual fixed and variable costs.
Fixed costs are those that remain the same regardless of your
sales volume. They are expressed in dollars. Rent, insurance
and real estate taxes, for example, are usually fixed.
Variable costs are those which change as your volume of
business changes. They are expressed as a percent of sales.
Inventory, raw materials and direct production labor, for
example, are usually variable costs.
Under the variable expenses column, use whole numbers as a
percentage, not decimal numbers. For example, use 45%, rather
than .45%.
For your business, each category of expense may either be fixed
or variable, but not both.
Suggestions
Note: You may want to print this information to use as
reference later. To delete these instructions, click the border of
this text box and then press the DELETE key.
The categories of expense shown above are just suggestions.
Change the labels to reflect your own accounting systems and
type of business. Breakeven is a "big picture" kind of tool; we
recommend that you combine expense categories to stay within
the 22 lines that this template allows.

One of the best uses of breakeven analysis is to play with
various scenarios. For instance, if you add another person to the
payroll, how many extra sales dollars will be needed to recover
the extra salary expense? If you borrow, how much will be
needed to cover the increased principal and interest payments?
Many owners, especially retailers, like to calculate a daily
breakdown. This gives everyone a target to shoot at for the day.
Project Capital Budget and BERecommended Capital Budgeting
Template Used in MS6010 Course Project. You can use another
template if desired.Enter a complete set of financial statements
for your company in the other tab.For this tab, complete only
the yellow boxes; everything else is done by formula. I have
added several rows below template for you to complete payback
calculations, if desired.Use this template to provide the capital
budgeting information on your course project. Change titles to
work with your project as needed.Some items will not apply to
your project and can be left blank. Template assumes equipment
purchase. If you have purchases other than equipmentyou will
need to adjust the depreciation rates to achieve correct
depreciationPart 1. Key Input Data: For this project you get to
make up reasonable numbers for the project idea you will
recommend for the company you chooseInitial Investment
DollarsEnter a reasonable price of recommended initial
investment$ Increase in current assetsHow much will your
current assets increase as a result of this project$ Increase in
current liabilitiesHow much will your current liabilities increase
as a result of this projectUsing some of the data from the left,
what is the break even in units?Unit salesWhat are you unit
sales each yearEnter in your formula here so that the correct
B/E units are shown.$ Sales price per unitHow much will you
sell each item for?What is the B/E in dollars?% Variable cost
per unitWhat is the variable cost per each item sold as a
percentage?$ Variable cost per unit$ - 0$ Fixed costsWhat are
the fixed costs for this project?Market value$ of equipment in
Y5Enter in a reasonable market value in dollars at end of

projectTax rate PercentageUse the precentage as
specifiedWACC or Discount PercentageUse the precentage as
specifiedPart 2. Depreciation Schedule if applicable. If you
have equipment, there is always
depreciationYearsAccum'dYearInitial Cost12345Deprn%
Equipment Deprn Rate0%0%0%0%0%Enter in Depreciation %-
straight lineEquipment Deprn, Dollars$0$0$0$0$0$0Ending Bk
Val: Cost - Accum'd Deprn$0Part 3. Net Salvage
ValuesEquipmentEstimated Market Value in Year 5$0Book
Value in Y50Expected Gain or Loss0Taxes paid on gain at tax
rate percentage0Net cash flow from salvage$0Part 4. Projected
Net Cash Flows (Time line of annual cash flows)Years, 1-4
basis012345Years, actual year
basis20xx20xx20xx20xx20xx20xxInvestment Outlays at Time
Zero:Equipment0Increase in Net Operating WC0Operating Cash
Flows over the Project's Life:Units sold00000Sales
price$0.00$0.00$0.00$0.00$0.00Sales
revenue$0$0$0$0$0Variable costs00000Fixed operating
costs00000Depreciation (equipment)00000Oper. income before
taxes (EBIT)00000Taxes on operating income00000Net
Operating Profit After Taxes (NOPAT)00000Add back
depreciation00000Operating cash flow$0$0$0$0$0Terminal
Year Cash Flows:Return of net operating working capital0After-
tax salvage value0Total termination cash flows$0Net Cash Flow
(Time line of cash flows)$0$0$0$0$0$0Part 5. Key Output:
Appraisal of the Proposed ProjectNet Present ValueCreate a
formula using the NPV function as specifiedIRRCreate a
formula using the IRR function as specifiedMIRRBonus: Create
a formula using the MIRR function as specifiedPaybackBonus:
How would you calculate payback using Excel?Enter in any
company information to explain project as required by
instructions. How will this project help your company's bottom
line?
Doug Letsch:
Enter your initial cost of equipment here
Doug Letsch:

Hit the ? Or help key in the upper right corner of Excel to see
how to use NPV function =NPV()
Doug Letsch:
how to use IRR function =IRR()
Doug Letsch:
how to use MIRR function =MIRR()
Explain Payback here: make calculations below
Copy of Company Fin StatementsPlease copy and paste a copy
of your public company's financial statements for the last 3
years.Include a Balance Sheet, Income Statement, and Statement
of Cash flow

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