TimeTech Mutually Exclusive Production Investment Decision
Cross-functional evidence-gathering · Incremental cash flows · Conditional decision-making
Appraise two mutually exclusive investment projects — a US$5 million T-200 high-end production line versus a US$3 million upgrade of the existing T-100 line — by gathering evidence across departments, building incremental after-tax cash flows and comparing NPV, IRR and payback period to reach one clearly reasoned, conditional recommendation.
The question
Choose one of two mutually exclusive projects: Option A invests US$5 million to build a T-200 high-end production line; Option B invests US$3 million to upgrade the existing T-100 production line.
Company background
TimeTech Ltd. is a smartwatch manufacturer; the T-100 is a mature product with a current baseline sales volume of around 100,000 units.
Techniques
Incremental Cash FlowsNPV / IRRPayback PeriodRelevant CostsSensitivity AnalysisFinancing ConstraintsStage GatesWho it suits
Recommended for learners at the Management level who are consolidating project investment appraisal — from building incremental cash flows through to risk-aware, governance-conditioned investment recommendations.
All courses
- TimeTech IPO Readiness, R&D Investment and Capital Allocation
- TimeTech T-100 Cost Diagnosis
- TimeTech 2025 Master Budget Preparation and Control
- TimeTech Costing Methods and the ABC Pilot
- TimeTech Short-term Commercial Decisions: A Comprehensive Simulation
- TimeTech Balanced Scorecard, Responsibility Centres and Transfer Pricing Governance