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Business Case
No finance degree required. Learn by doing — the same way top MBA programs teach decision-making.
What You'll Actually Learn
Real business skills, explained in plain English
ROI - Return on Investment
For every dollar you spend, how much do you get back? It's like checking if a $10 movie ticket was worth the entertainment.
NPV - Net Present Value
Would you rather have $100 today or $100 in a year? Money now is worth more than money later. NPV calculates exactly how much more.
IRR - Internal Rate of Return
Think of this as your project's "interest rate." If your bank offered this rate, would you be happy? Compare it to what else you could do with that money.
Payback Period
How long until you get your money back? If you invest $1,000 and make $250/year, payback is 4 years. The shorter, the better.
Case Challenges
Practice with real-world scenarios. Each case teaches you something new.
How SimpleCase Works
Four steps to a solid business case
Research the Opportunity
Gather facts about your market: How big is it? Who are your customers? What do competitors charge? You'll answer guided questions and cite your sources - just like professionals do.
Set Your Guardrails
Before crunching numbers, decide what "good enough" looks like. Set thresholds for minimum ROI, maximum payback period, required margins. This prevents you from talking yourself into a bad deal.
Build the Financial Model
Now enter your costs, revenues, and growth assumptions. Watch as the tool builds cash flow projections and shows whether you pass or fail your guardrails.
Make Your Call
Review the data, make your decision, then learn why your recommendation makes sense (or doesn't). This is where the real learning happens.
Test Your Business IQ
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Got Your Own Idea?
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Step 2: Set Your Decision Guardrails
What does "good enough" look like? Define your success criteria BEFORE seeing the numbers to avoid bias.
Guardrails are minimum requirements you set BEFORE seeing results. This prevents you from talking yourself into a bad deal because you're excited about the idea. Professional investors always have guardrails.
🎯 Financial Guardrails
Set the minimum acceptable values for each metric. We'll check if your case passes.
| Year | Revenue | Costs | Net Cash Flow | Cumulative |
|---|---|---|---|---|
| Enter values above to see projections | ||||
Net Present Value
The total value created by the project in today's dollars. It accounts for the time value of money by discounting future cash flows.
Internal Rate of Return
The effective annual return rate the project generates. Compare this to your cost of capital (WACC) to see if the project beats your hurdle rate.
Payback Period
How long until you recover your initial investment. Shorter payback = lower risk, as less time for things to go wrong.
Return on Investment
Total return as a percentage of your investment. Shows how much you get back for every dollar invested over the project lifetime.
Shareholder Value Add
The economic profit created above the cost of capital. Shows the true value created for shareholders after accounting for the opportunity cost of invested capital.
Profitability Index
The ratio of value received to value invested. A PI of 1.5 means you get $1.50 back (in present value) for every $1.00 invested.
Step 1: Research Your Opportunity
Before crunching numbers, you need facts. Answer these questions with real data you find through research.
The best business cases are built on facts, not guesses. By researching these questions first, your financial projections will be based on reality - not wishful thinking.
🌍 Market Size & Opportunity
💰 Cost Research
👥 Customer Insights
Step 4: The Bottom Line
Time to make your call. Review the data and decide: Should you proceed?
Your Analysis Summary
Here's everything you've learned about this opportunity
Net Present Value
Return Rate
Payback Period
ROI
Market Research Insights
Generate Market Insights in Step 1 to see a summary here.
Financial Verdict
Add financial scenarios in Step 3 to see the verdict here.
Guardrails Check
Set guardrails in Step 2 to see your criteria recap here.
Assessment
Complete your financial analysis (Step 3) to get an assessment.
Based on your analysis, should you proceed with this project?
Why "Proceed" is the right recommendation:
- Complete your financial analysis to see specific reasons here.
What the data shows:
- Complete your financial analysis to see specific insights here.
When WOULD "Pause" be the right call?
- Key guardrails failed (ROI below minimum, payback too long)
- Your research revealed serious concerns (no demand, strong competition, regulatory issues)
- The assumptions seem unrealistic (need more data before committing)
- External factors make timing bad (budget constraints, competing priorities)
What is NPV (Net Present Value)?
+What It Is
NPV is the difference between the present value of all future cash inflows and the present value of all cash outflows. It tells you, in today's dollars, how much value a project will create (or destroy).
The Formula
Where CFt = Cash flow in year t, r = discount rate, t = year number
Why It Matters
NPV is considered the gold standard of investment analysis because:
- It accounts for the time value of money (a dollar today is worth more than a dollar tomorrow)
- It gives you an absolute dollar amount of value creation
- It's directly additive - you can sum NPVs of multiple projects
Typical Thresholds
| Result | Interpretation |
|---|---|
| NPV > $0 | Project creates value - proceed |
| NPV = $0 | Project breaks even - consider other factors |
| NPV < $0 | Project destroys value - reconsider |
What is IRR (Internal Rate of Return)?
+What It Is
IRR is the discount rate at which the NPV of a project equals zero. Think of it as the "break-even" interest rate, or the effective annual return the project generates.
The Formula
IRR is calculated iteratively since there's no direct algebraic solution.
Why It Matters
- Easy to compare against your cost of capital (WACC)
- Expressed as a percentage, making it intuitive
- Useful for comparing projects of different sizes
Typical Thresholds
| Result | Interpretation |
|---|---|
| IRR > WACC + 5% | Strong returns above cost of capital |
| IRR > WACC | Returns exceed cost of capital - acceptable |
| IRR < WACC | Returns below cost of capital - reconsider |
What is Payback Period?
+What It Is
Payback period is the time it takes for cumulative cash flows to recover the initial investment. It answers "How long until I get my money back?"
The Formula
Why It Matters
- Simple and intuitive measure of liquidity risk
- Shorter payback = lower risk of things going wrong
- Important when capital is constrained or markets are volatile
Limitations
Payback ignores the time value of money and any cash flows after the payback period. Use it alongside NPV and IRR, not alone.
Typical Thresholds
| Result | Interpretation |
|---|---|
| < 3 years | Quick recovery - lower risk |
| 3-5 years | Moderate - acceptable for many projects |
| > 5 years | Long recovery - higher risk |
What is ROI (Return on Investment)?
+What It Is
ROI is a simple ratio measuring the total return relative to the investment cost. It's the most commonly used metric for communicating investment performance.
The Formula
Why It Matters
- Universally understood metric
- Easy to calculate and communicate
- Useful for quick comparisons
Limitations
ROI doesn't account for time - a 50% ROI over 1 year is very different from 50% over 10 years. Always consider the timeframe.
Typical Thresholds
| Result | Interpretation |
|---|---|
| > 20% | Strong returns |
| 10-20% | Acceptable returns |
| < 10% | Weak returns - may not justify risk |
What is SVA (Shareholder Value Add)?
+What It Is
SVA measures the value created above and beyond the cost of capital employed. It's similar to Economic Value Added (EVA) and shows whether a project truly creates shareholder wealth.
The Formula
Simplified: SVA = Total Net Returns - (Investment × Required Return Rate)
Why It Matters
- Shows true economic profit, not just accounting profit
- Accounts for the opportunity cost of capital
- Directly measures value creation for shareholders
Typical Thresholds
| Result | Interpretation |
|---|---|
| SVA > $0 | Creates value above cost of capital |
| SVA = $0 | Returns exactly match cost of capital |
| SVA < $0 | Destroys shareholder value |
What is PI (Profitability Index)?
+What It Is
PI is the ratio of the present value of future cash flows to the initial investment. It shows how much value you get per dollar invested.
The Formula
Why It Matters
- Useful when you have limited capital and must choose between projects
- Shows efficiency of capital use
- A PI of 1.5 means you get $1.50 back for every $1 invested
Typical Thresholds
| Result | Interpretation |
|---|---|
| > 1.2 | Strong value creation per dollar |
| 1.0 - 1.2 | Acceptable - project is worthwhile |
| < 1.0 | Losing money - don't proceed |
What is WACC (Discount Rate)?
+What It Is
WACC (Weighted Average Cost of Capital) represents the minimum return a company needs to earn to satisfy its investors. It's used as the discount rate in NPV calculations.
The Formula
Where: E = equity value, D = debt value, V = total value, Re = cost of equity, Rd = cost of debt, Tc = tax rate
Why It Matters
- Represents the hurdle rate for investment decisions
- If a project can't beat WACC, it destroys value
- Accounts for both debt and equity financing costs
Typical Values
- Large, stable companies: 6-9%
- Mid-size companies: 9-12%
- High-growth or risky ventures: 12-20%+
Understanding Revenue Models
+What It Is
Your revenue model describes how your project generates income. We break it into simple components:
Key Components
- Volume/Units: The total addressable activity (customers, transactions, leads)
- Conversion Rate: What percentage actually generates revenue
- Revenue per Unit: How much you earn per converted unit
- Growth Rate: Expected year-over-year increase
Example
10,000 website visitors × 5% conversion × $50 average order = $25,000 Year 1 revenue
With 10% growth: Year 2 = $27,500, Year 3 = $30,250...
One-Time vs Recurring Costs
+One-Time Costs
These are upfront investments that happen only at the start:
- Implementation/setup fees
- Initial training costs
- Equipment purchases
- Software licenses (if perpetual)
- Migration/conversion costs
Recurring Costs
These repeat every year throughout the project:
- Employee salaries and benefits
- Software subscriptions
- Marketing spend
- Operations and maintenance
- Support costs
Employee Loaded Costs
+What It Is
Loaded cost is the TRUE cost of an employee, not just their salary. It includes all associated expenses.
Typical Components
- Base salary: 100%
- Benefits (health, dental, vision): 15-25%
- Retirement contributions: 3-10%
- Payroll taxes: 7-10%
- Training & development: 2-5%
- Equipment & workspace: 5-15%
Rule of Thumb
Loaded cost is typically 1.25x to 1.5x base salary
Example: $60,000 salary → $75,000 - $90,000 loaded cost
Customer Acquisition Cost (CAC)
+What It Is
CAC is the total cost to acquire one new customer. It's a critical metric for understanding marketing efficiency.
The Formula
What to Include
- Advertising spend
- Marketing staff salaries
- Sales commissions
- Tools and software
- Content creation costs
Benchmarks by Industry
- SaaS: $100-$500
- E-commerce: $10-$50
- Financial Services: $200-$1,000
- B2B Enterprise: $1,000-$10,000
Growth Rate Projections
+What It Is
The expected year-over-year increase in revenue or volume. Be realistic - overly optimistic growth assumptions are a common pitfall.
Factors to Consider
- Market growth rate
- Competitive dynamics
- Your historical performance
- Resource constraints
- Market saturation
Conservative Estimates
- Mature markets: 2-5%
- Growing markets: 5-15%
- High-growth/new products: 15-30%
- Startups (early stage): 30-100%+
Pro Tip
Run multiple scenarios with different growth rates (pessimistic, realistic, optimistic) to understand sensitivity.
Export to PowerPoint
Generate a professional presentation with your financial analysis and feasibility criteria.