Practical sheet | REF: FIC1205 V1

The cumulative balance sheet, the dashboard of a project's economic performance

Author: Jean DAUVERGNE

Publication date: March 10, 2013 | Lire en français

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    3. What happens if there is a cost drift before the T0 date?

    Among the risks inherent in the project, some may lead to higher costs than expected:

    • cost of design, prototyping and testing,

    • other expenses (market research),

    • but also investment,

    with obvious repercussions on the entry ticket.

    Using the previous example (§3), the entry ticket is increased from 10 to 20,000 k€. The previous figure shows that the breakeven point is shifted by one year, and that the profit generated is down by 50,000 k€.

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    What happens if there is a cost drift before the T0 date?