Project Option #3: Manufacture Coffee Expansion Project Title Project Description and Details Project Cost (Initial Investment) First Year Cash Flow Annual Growth Rate (5 years) Expenses as a percentage of Revenues Payback Period Development of Coffee Line Research and development has been asking that the company develop a line of coffees for several years. This initial project would launch several varieties: a regular, a regular decaf, and three flavors. It would require a large investment by the company to include facility space, equipment, staff, etc. The first year would be a building/launching year, so cash flow would be minimal. However, the growth rate would be huge. $45,500,000 $13,000,000 12% 34% Calculation of Minimum Payback Period: Years NPV of Projected Cash Flows Year 0 Cash Flow Year 1 Cash Flow Year 2 Cash Flow Year 3 Cash Flow Year 4 Cash Flow Year 5 Cash Flow Projected Revenues at annual growth rate Projected Expenses at 34% of Revenue Annual Cash Flows Discount rate for each year (6%) Present value of cash flows NPV of Projected Cash Flows Internal Rate of Return (IRR):