Annual ROI
299%
on $501K net investment
MATSUURA MACHINE TOOLS
ROI & Capital Investment Analysis
Payback period
0.3 yrs
to full cost recovery
Added profit / yr
$1.50M
incremental net profit
Added revenue / yr
$2.03M
from added capacity
MATSUURA MACHINE TOOLS
ROI & Capital Investment Analysis
Machines Compared
| Metric | Current | Proposed |
|---|---|---|
| Machine | 3-Axis VMC | Matsuura MX-520 |
| Capital cost | $95,000 | $520,000 |
| Cycle time / part | 60.0 min | 50.0 min |
| Labor time / part | 58.0 min | 32.0 min |
| Utilization | 85.0% | 92.0% |
| Annual volume | 3,400 | 4,416 |
| Cost / part | $565 | $556 |
| Net profit / yr | $4,877,955 | $6,378,329 |
P&L Comparison
| Line item | Current | Proposed | Change |
|---|---|---|---|
| Gross sales | $6,800,000 | $8,832,000 | +$2,032,000 |
| Material cost | $1,734,000 | $2,208,000 | +$474,000 |
| Labor & overhead | $167,620 | $134,246 | -$33,374 |
| Annual maintenance | $1,425 | $7,425 | +$6,000 |
| Depreciation | $19,000 | $104,000 | +$85,000 |
| Net annual profit | $4,877,955 | $6,378,329 | +$1,500,374 |
Five-Year Cash Flow
| Year | Annual | Cumulative |
|---|---|---|
| Initial investment | -$501,000 | -$501,000 |
| Year 1 | $1,604,374 | $1,103,374 |
| Year 2 | $1,604,374 | $2,707,747 |
| Year 3 | $1,604,374 | $4,312,121 |
| Year 4 | $1,604,374 | $5,916,494 |
| Year 5 | $1,708,374 | $7,624,868 |
Assumptions: no tax modeling; depreciation added back to cash flow; current machine assumed owned outright; trade-in credited at purchase; residual value of the proposed machine realized in the final year. Net investment is $501,000 and annual cash flow is $1,604,374.
Machines being compared
Current machine
Current baseline
3-Axis
Annual volume3,400
Net profit / yr$4,877,955
Proposed machine
Proposed Matsuura
5-Axis
Annual volume4,416
Net profit / yr$6,378,329