Post on 22-Dec-2015
TEAM 1
Brenda Watkins – Leader/Organizer
Justin Legere – Leader/Organizer
Chweya Masongo – Summarizer
Jeffrey McCarthy – Techie
BUSINESS VENTURE
OVERVIEW
• SCENERIOS
• IN-HOUSE
• SUBCONTRACTING
• CASH FLOW DIAGRAM
• SENSITIVITY ANALYSIS
• CONCLUSIONS
APEX Space Engineering Co.
• Specialization:
Space exploration vehicles
and lunar atmosphere test equipment.
• 10 Year Contract with NASA for
$11.9 million
• 2 Projects Per Year
SCENERIO
IN HOUSE FABRICATION
Pros:•Complete Production Control•Tax Benefits
Cons:•Liability•Start-Up Cost•Overhead
In House Cash Flow:In House Cash Flow
-$1,200,000
-$1,000,000
-$800,000
-$600,000
-$400,000
-$200,000
$0
$200,000
1 2 3 4 5 6 7 8 9 10
Years
Sub Contract Cash Flow
Cash Flow Diagram: Sub Contracting
-$800,000
-$700,000
-$600,000
-$500,000
-$400,000
-$300,000
-$200,000
-$100,000
$0
1 2 3 4 5 6 7 8 9 10
Sensitivity Analysis
Sub vs. In-House Standard Model
0
1
2
3
4
5
6
7
0 1 2 3 4 5Number Projects/Year
Pres
ent W
orth
Cos
t (10
^5)
Sensitivity Analysis: SubContracting
Sensitivity Analysis: In-House
Linear (Sensitivity Analysis:Sub Contracting)
Linear (Sensitivity Analysis:In-House)
Inflation @ 4%
0
1
2
3
4
5
6
7
0 1 2 3 4 5
Number Projects/Year
Pre
sen
t W
ort
h C
ost
(10^
5)
Sub Contracting
In-House
Linear (Sub Contracting)
Linear (In-House)
Inflation @ 1%
0
1
2
3
4
5
6
0 1 2 3 4 5
Numbers Projects/Year
Pre
sen
t W
ort
h C
ost
(10^
5)
Sub Contracting
In-House
Linear (In-House)
Linear (Sub Contracting)
Salary @ 6% Increase
0
1
2
3
4
5
6
7
0 1 2 3 4 5
Number Projects/Year
Pre
sen
t W
ort
h C
ost
(10^
5)
Sub Contracting
In-House
Linear (In-House)
Linear (Sub Contracting)
Salary @ 10% Increase
0
1
2
3
4
5
6
7
0 1 2 3 4 5
Number of Project/Year
Pre
se
nt
Wo
rth
of
Co
st
(10
^5
)
Sub Contracting
In-House
Linear (In-House)
Linear (Sub Contracting)
Materials @ $313,200
0
1
2
3
4
5
6
7
0 1 2 3 4 5
Number Projects/Year
Pre
sen
t W
ort
h C
ost
(10^
5)
Sub Contracting
In-House
Linear (In-House)
Linear (Sub Contracting)
Materials @ $113,200
0
1
2
3
4
5
6
7
0 1 2 3 4 5
Number Projects/Year
Pre
sen
t W
ort
h C
ost
(10^
5)
Sub Contracting
In-House
Linear (In-House)
Linear (Sub Contracting)