[Company Name]

Web Site Budgeting Tool

[Date]

Gray cells contain calculations that should not be altered.

Company Data
Required rate of return 10%
Tax rate 30%

Initial Investment in Web Site YEAR 1 2 3

Hardware (e.g., servers) $25,000.00
Software (e.g., e-commerce catalog software) $15,000.00
Development (e.g., third-party site design and development) $150,000.00
Total Initial Investments $190,000.00

Benefits from Web Site YEAR 1 2 3

Direct sales $15,000.00 $50,000.00 $75,000.00
Incremental sales resulting from enhanced promotional/salesperson
effectiveness $25,000.00 $25,000.00 $25,000.00
Incremental sales resulting from increased partner participation $25,000.00 $25,000.00 $25,000.00
Reduced travel costs $25,000.00 $25,000.00 $25,000.00
Reduced customer service costs $50,000.00 $50,000.00 $50,000.00
Reduced printing and shipping costs $5,000.00 $5,000.00 $5,000.00
[Other benefits] $0.00 $0.00 $0.00
[Other benefits] $0.00 $0.00 $0.00
[Other benefits] $0.00 $0.00 $0.00
Total Benefits $145,000.00 $180,000.00 $205,000.00

Costs (Excluding Initial Capital Investments) YEAR 1 2 3

Cost of sales $7,500.00 $25,000.00 $37,500.00
Maintenance $15,000.00 $15,000.00 $15,000.00
Project management, customer support $35,000.00 $35,000.00 $35,000.00
Online advertising, search-engine registration $10,000.00 $10,000.00 $10,000.00

Depreciation on capital expenditures (calculation uses three-year period) $63,333.33 $63,333.33 $63,333.33
Hosting, domain-name registration $150.00 $150.00 $150.00
General and administrative (e.g., rent, insurance, exec. salaries) $10,000.00 $10,000.00 $10,000.00
[Other costs] $0.00 $0.00 $0.00
[Other costs] $0.00 $0.00 $0.00
[Other costs] $0.00 $0.00 $0.00
Total Costs $140,983.33 $158,483.33 $170,983.33

Totals YEAR 1 2 3
Net Benefits (Costs) $4,016.67 $21,516.67 $34,016.67
Tax $1,205.00 $6,455.00 $10,205.00
Value after tax $2,811.67 $15,061.67 $23,811.67
Depreciation added back $63,333.33 $63,333.33 $63,333.33
Cash flow -$190,000.00 $66,145.00 $78,395.00 $87,145.00
Cumulative cash flow -$190,000.00 ($123,855.00) ($45,460.00) $41,685.00

Evaluation Metrics
Net present value (NPV) $394.40
Internal rate of return (IRR) 10.11%
Payback period (in years) 2.52