Commonwealth Bank Chief Executive Officer, Matt Comyn, holding a clock and looking slightly glum. Time Value of Money One Australian dollar is worth one Australian dollar. If you asked to buy my dollar off me, I’d be reluctant to sell it for anything less than 100 cents. If you asked me to lend you a dollar, I’d expect you to give me a dollar back the next time I saw you. This all seems obvious. So, when is a dollar not worth a dollar? The moment time gets involved. If you a

NPV, IRR and Payback Period for theoretical BrainChip product investment Product Development Opportunity In this theoretical situation, BrainChip Holdings is evaluating two mutually exclusive capital investment projects, intended to expand its presence in embedded computing and edge‑AI markets. Both projects require significant upfront capital and have a useful product life expectancy of 7 years. A discount rate of 8% was applied to assess financial viability. Included in the

Ratios of BrainChip Holdings Profitability Ratios BrainChip’s profitability situation is dominated by what happened in 2023 and 2024. Gross Profit Margin continued to drop, moving from positive gross margins into a negative gross margin in 2024, which means costs of goods exceeded sales. The 2023 drop, aligned with a crash in revenue and 2024 pushed further into negative territory as production costs increased. Net Profit Margin tells the same story. Operating expenses and sh

For this step, I’m using creative licence, in assuming my company is profitable. In reality, they are currently sinking around $20M per annum into Research and Development, while revenue is in $100,000’s. Edge AI Box Sale price: US$995.00 Contribution Margin = Sales Price less Variable Cost I’m assuming a variable cost of 70% = $696.50 $995.00 - (70% X $995.00) = $995.00 - $696.50 = $298.50 BrainChip, Inc. (n.d.). Akida™ Edge AI box [Image]. https://shop.brainchipinc.com/prod

Contribution margin Contribution margin is the breathing room in a business. The portion of each sale that covers fixed costs and, if there’s anything left over, becomes profit. During my time working in residential construction, we added that contribution margin transparently to project quotes, as a flat 20% builder’s margin on materials and labour. That margin had a very practical job, paying for the fixed costs we couldn’t attach to a single invoice, like insurance, vehicl