This online tool is provided in accompaniment of the De-Risking Emerging Market Opportunities (DEMO) Toolkit, serving as a template for assessing the profitability of emerging opportunities. We recommend that all users first consult the toolkit.     
    In addition to this overview, there are two tabs that you will need to navigate to titled Cash Flow Projections and Discount Rate Selection, serve as templates for you to input your assumptions. The final tab titled Profitability Dashboard, serves as the primary output.     
      Cash Flow Projections This form serves as a template for your cash flow projections, which will flow into calculations on subsequent pages. It will prompt you to state a few assumptions regarding demand, price, and cost, and calculate your cash flows from them. It also leaves room for you to manually input other cash flow line items that don't fall under these assumptions.     
      Discount Rate Selection This form takes data on your financing sources as an input and calculates 3 common discount rate choices for you. You are then required to specify which discount rate you would like to use, which is then used in subsequent calculations on other sheets.    
      Profitability Dashboard Taking your cash flow projections and discount rate as inputs, this page provides a dashboard for each of the four profitability metrics provided: ROI, Payback Period, NPV, and IRR. It also provides a space for you to evaluate each metric as positive, neutral, or negative to aid in decision making.     
Note, any and all cells that require your input are shaded in yellow as below. These cells are editable.
Content Name
      Cells that contain major outputs are shaded in grey as below. These cells are not editable.        
Content Name Value
      Cells that contain other outputs that do not need your attention are shaded in blue as below. These cells are not editable.     
Content Name Value
        Disclaimer: Note that this toolkit is meant to serve as a guide and we would encourage users to engage financial expertise prior to make any investment decisions. As such, we do not assume any responsibility or liability for business decisions that are made from the insights provided in this tool.    
  Cash Flow Projections  
    Step 1 - Fill in the following table with your assumptions for the number of units sold, selling price, and cost of goods sold (COGS) over the next 5 years. To save time and effort, consider leveraging your findings from Section 1 for speed of onset (how quickly you expect to start selling) and duration of the opportunity. You can toggle these assumptions to see how sensitive the profitability metrics are to your choices.     
      Demand, Price, & Cost Assumptions      
      Assumption Year 1 Year 2 Year 3 Year 4 Year 5      
      Units Sold      
      Assumption Value              
      Selling Price              
      Cost of Goods Sold (COGS)              
    Step 2 - Leveraging your estimated transition costs from Section 3, fill in the table below with the sum of your up-front transition costs and any new, ongoing expenses associated with the new opportunity. For example, up-front costs could include new machinery purchases and ongoing costs may include additional wages paid to staff the new opportunity.     
      Transition Cost Assumptions              
      Assumption Up-Front              
      Total Up-Front Costs              
      Ongoing Costs (Annual)              
    Step 3 - Based on the assumptions above, the first 4 lines of the cash flow table below will automatically generate. If you want to add additional line items that aren't captured by some of the simple assumptions above, do so in the yellow boxes labelled Other. The final row will automatically sum your net cash flows for each of the periods listed.     
Category Item Up-Front Year 1 Year 2 Year 3 Year 4 Year 5
Operations Sales revenue
    Cost of goods sold      
Transition Costs Up-Front
    Ongoing $0    
      Net Cash Flow    
  Discount Rate Selection  
Step 1 - Fill in the following information regarding your firm's equity financing, debt financing, and corporate tax rate. 
    Debt Financing   Equity Financing   Corporate Tax Rate    
    Source Amount Interest Rate   Amount ($)   Tax Rate (%)    
      Min. Expected Return          
    Step 2 - The table below (left) automatically calculates some common discount rate choices from your inputs above.     
    Common Discount Rate Choices                
    Weighted Average Cost of Debt                
    Weighted Average Cost of Capital                
    Min. Expected Return                
    Step 3 - Using the guidance provided in the DEMO Toolkit, select your discount rate and enter it in the cell on the right below.     
    Selected Discount Rate                
  Profitability Estimation Dashboard  
              Payback Period    
            IRR Discount Rate    
  Taking your cash flow projections as given, the table below will automatically calculate the return on investment of the project based on your cash flow inputs on the previous sheets.     
  Payback Period  
  Taking your cash flows as given, the table below calculates the Payback Period of the opportunity automatically.     
    Period Up-Front 1 2 3 4 5    
    Net CF    
    Cumulative CF    
    Payback Period              
  Net Present Value (NPV)  
  Taking your cash flows and discount rate as given, the table below generates the NPV of the opportunity automatically.     
    Discount Rate                
    Period Up-Front 1 2 3 4 5      
    Net CF      
    PV of CF      
  Internal Rate of Return (IRR)  
  Taking your cash flows and discount rate as given, the table below calculates the IRR of the opportunity.    
    Discount Rate                
    Period Up-Front 1 2 3 4 5      
    Net CF