Make the machine earn its way through the ramp

Count revenue the shop would otherwise miss

Hours transferred from an existing machine are not automatically new sales. Enter work that the added capacity enables, or quantify the old capacity it frees for other sold work. Variable cost should include the additional operator effort, tooling, power and outsourced work needed for those hours. Fixed costs cover the extra insurance, software, service or floor-space commitment. The two preset buttons are hypothetical purchase cases, not equipment quotations or a recommendation to buy either machine.

Read the two recovery dates separately

Full-investment payback accumulates operating cash against purchase plus installation cost without financing. Initial-cash recovery begins with down payment plus installation and subtracts loan payments each month until the loan term ends. The payment uses a fixed monthly interest rate and level payments; zero interest spreads principal evenly over the term. These are different questions, so a financed scenario can recover its initial cash sooner while still owing principal. The model checks end-of-month balances for up to 600 months and reports when recovery does not occur within that horizon.

Stress the assumptions before committing cash

During a six-month ramp, month one sells one-sixth of the full hours and month six reaches the full rate. Fixed operating costs start immediately. Change hours, ramp and contribution to test delays in training, programming or customer approval. No income taxes, depreciation tax effects, resale proceeds, working-capital timing or discount rate are included, so the result is an undiscounted planning scenario rather than a complete investment valuation. Review the financing contract and your actual backlog separately before making a purchase decision.

• Build the machine’s operating-rate assumptions