[Company Name]

Web Site Budgeting Tool

[Date]

Gray cells contain calculations that should not be altered.

Company Data
Required rate of return 10.0%
Tax rate 30.0%

0
Initial Investment in Web Site
Hardware (e.g., servers) $25,000
Software (e.g., e-commerce catalog software) 15,000
Development (e.g., third-party site design and development) 150,000

Total Initial Investments $190,000

Benefits from Web Site

Direct sales
Incremental sales resulting from enhanced promotional/salesperson effectiveness
Incremental sales resulting from increased partner participation
Reduced travel costs
Reduced customer service costs
Reduced printing and shipping costs
[Other benefits]
[Other benefits]
[Other benefits]

Total Benefits

Costs (Excluding Initial Capital Investments)

Cost of sales
Maintenance
Project management, customer support
Online advertising, search-engine registration
Depreciation on capital expenditures (calculation uses three-year period)
Hosting, domain-name registration
General and administrative (e.g., rent, insurance, exec. salaries)
[Other costs]
[Other costs]
[Other costs]

Total Costs

Net Benefits (Costs)

Tax
Value after tax
Depreciation added back
Cash flow ($190,000)
Cumulative cash flow ($190,000)

Evaluation Metrics
Net present value (NPV) $394
Internal rate of return (IRR) 10.1%
Payback period (in years) 2.52
 YEAR
1 2 3

$15,000 $50,000 $75,000

25,000 25,000 25,000
25,000 25,000 25,000
25,000 25,000 25,000
50,000 50,000 50,000
5,000 5,000 5,000
0 0 0
0 0 0
0 0 0

$145,000 $180,000 $205,000

$7,500 $25,000 $37,500

15,000 15,000 15,000
35,000 35,000 35,000
10,000 10,000 10,000
63,333 63,333 63,333
150 150 150
10,000 10,000 10,000
0 0 0
 0 0 0
0 0 0

$140,983 $158,483 $170,983

$4,017 $21,517 $34,017

1,205 6,455 10,205
2,812 15,062 23,812
63,333 63,333 63,333
$66,145 $78,395 $87,145
($123,855) ($45,460) $41,685