Cost-Benefit analysis

Development of portfolio management intelligent application for financial

consultants

​School of Creative Industry

Technological Entrepreneurship

​ITM-2201

Amina Kudaibergenova, Bayan Alimzhan,

​Ayaulym Shaimuratova

Course Instructor: Nurguzhina Assel

Astana, 2024
 Cost Benefit Analysis

Figure 1. CBA

Team members:

● 1 Project manager
● 2 Full Stack developers
● 1 UX/UI designer
● 1 Finance consultant
● 1 QA engineer

Salaries are calculated based on the average market rates in Kazakhstan, sourced from platforms
like Headhunter and various Telegram channels.

Office rental costs: For the current year and the next, we will be renting a 23 m² office space in
a business center at a rate of $9.80 per m², which totals approximately $225.40 per month. This
price includes utilities, with the exception of internet service, which will be billed separately.
After three years, we plan to relocate to a new office space named SAAD.

Software purchases: We will invest in the following software solutions to enhance our
operations:

● Ethereum Development Kits, Truffle Suite, TensorFlow/PyTorch, DataRobot, IBM

Watson AI, Power BI, Google Cloud, MetaMask, Jira

Accounting and legal services: After researching various legal and accounting service providers
in Kazakhstan, we have selected BuhService for our accounting needs. For legal services, we
have chosen a package that costs 120,000 tenge.
 Marketing expenses: Our marketing budget will cover various events and advertisements
designed to attract new clients.

Insurance: We will partner with NSK for our insurance needs.

Subscription model: We will benefit from a tiered subscription model with the following
pricing:

● Basic Plan: $70/month

● Standard Plan: $100/month
● Premium Plan: $130/month

Our pricing strategy is informed by an analysis of competitors in the market.

Transaction fees: For each transaction, we will charge a fee of 0.5%.

Sensitivity analysis

Year Base Case 10% 10% Base Case 5% 5%

Increase Decrease Increase Decrease

CY+1 $82,051.96 $90,256.15 $72,046.77 $170,241. $178,253.07 $161,228.97

02

CY+2 $454,152.25 $499,567.48 $408,737.03 $181,075. $190,129.70 $171,022.10

Projected 90
Projected
Revenues
Costs
CY+3 $887,856.10 $976,641.71 $799,070.49 $197,670. $207,554.13 $187,787.09
61

CY+4 $1,304,931.6 $1,435,424.8 $1,174,438.4 $207,728. $217,114.75 $197,342.91

6 3 9 33

CY+5 $1,467,057.4 $1,613,763.2 $1,320,351.7 $218,263. $228,176.53 $207,350.19

8 3 3 36

Net present value (NPV)

Using a discount rate of 2%, we will calculate the present value (PV) of both revenues and costs
over the five-year period.

Total PV Benefits/Costs:
 Year Cash Flow (Revenue) PV Benefits Cash Flow (Costs) PV Costs

CY+1 $82,051.96 $80,024.81 $170,241.02 $166,522.98

CY+2 $454,152.25 $445,942.56 $181,075.90 $174,044.50

CY+3 $887,856.10 $867,648.90 $197,670.61 $186,269.43

CY+4 $1,304,931.66 $1,267,235.93 $207,728.33 $191,908.87

CY+5 $1,467,057.48 $1,428,145.24 $218,263.36 $197,687.85

Total $4,088,297.54 $916,633.63

NPV:

PV=CF​/(1+r)n

Where:

● CFCFCF = Cash Flow in year nnn

● rrr = Discount rate (2% = 0.02)
● nnn = Year

NPV=Total PV Benefits−Total PV Costs=4,088,297.54−916,633.63=3,171,663.91

3. Sensitivity Analysis NPV

Scenario Total PV Benefits Total PV Costs NPV

Base Case $4,088,297.54 $916,633.63 $3,171,663.91

10% Increase in Revenue $4,539,695.24 $916,633.63 $3,623,061.61

10% Decrease in Revenue $3,682,807.95 $916,633.63 $2,766,174.32

5% Increase in Costs $4,088,297.54 $964,465.32 $3,123,832.22

5% Decrease in Costs $4,088,297.54 $870,801.94 $3,217,495.60

 5-Year projection

In the current year (CY), which spans November to December, our focus will be exclusively
on the design phase of our blockchain-based application. We will prioritize gathering input from
potential users and stakeholders to shape our development plan. As we will not be generating
revenue during this period, our efforts will be directed towards laying a solid foundation for the
project.

In the first half of CY+1, from January to May, we will enter the development phase, where
we will enhance the application based on the insights gathered during the design stage. By the
end of this period, we anticipate launching the application in June and securing at least 85 users
as part of our initial rollout. This early adoption will help us refine our services further based on
real-world feedback, with projected revenue of approximately $82,051.96 for the year as we start
onboarding clients.

In CY+2, we will ramp up our marketing efforts and leverage testimonials from our initial users
to attract more clients. By the end of this year, we aim to expand our user base to 300 financial
consultants. With the application fully operational and additional features implemented, we
expect revenue to reach $454,152.25, reflecting our growing market presence and client
satisfaction.

In CY+3, our goal will be to strengthen our brand and expand our offerings, targeting 400 users
by the end of the year. We will focus on strategic partnerships and marketing initiatives to
enhance our reach within the financial consulting industry. This year is projected to yield
revenue of $887,856.10, driven by increased user adoption and expanded services.

In CY+4, we plan to enhance our application with new features and tools that cater to our users'
evolving needs. By this point, we expect to onboard at least 500 financial consultants. Our
focus will also include potential international expansion, aiming for a revenue projection of
$1,304,931.66 as we capitalize on our established reputation and client trust.

In CY+5, we will concentrate on consolidating our market position and optimizing our services
for scalability. Our goal will be to reach 600 users by the end of the year. We anticipate
continued growth in revenue, projecting $1,467,057.48 as we reinforce our role as a leader in
providing intelligent blockchain solutions for financial consultants.
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