What are the odds your product launch actually makes money?
A single-point NPV can make a risky launch look safe. This model treats first-year demand and annual sales decay as uncertain, then runs the full tax and depreciation cash flow 10,000 times. The answer is a probability, not a single number.
Finance Intermediate Monte Carlo Pro engine
After you install, this is the model to open.
Product Launch Go/No-Go NPV
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
This one runs on a Pro engine, and every free install includes five full-quality runs on your own numbers, shared across all five Pro engines rather than five for each. After that, Pro is $199/year.
The answer
One click runs 10,000 trials of the full 5-year cash flow. Typical results:
- Point-estimate NPV
- +$9.5M the static spreadsheet says go
- Chance NPV is negative
- ~33% about 1 launch in 3 loses money
- NPV range, 10th to 90th percentile
- −$17M to +$35M on a $100M investment
- Year 5 vs year 1 cash flow
- $21M vs $38.8M sales decay compounds quietly
At best-guess inputs this launch clears a +$9.5M NPV, and most teams would greenlight it on that number alone. Run 10,000 trials and the picture changes: mean NPV is still about +$9.1M, but the standard deviation is near $20M, so roughly 1 in 3 simulated launches destroys value. Compounding sales decay is the quiet culprit, dragging year 5 cash flow to $21M from $38.8M in year 1. The point estimate and the simulation agree on the average and disagree completely on the risk.
The model
A 5-year cash-flow model for a powersports maker weighing a $100M electric side-by-side line. Two inputs are uncertain: first-year demand and the rate at which sales decay each year.
| Upfront investment | $100M |
| Year 1 units sold | 9,000 ± 2,000 (uncertain) |
| Annual sales decay | 5% – 8% – 12% (uncertain) |
| Unit price | $15,000 |
| Year 1 unit cost | $10,000, growing 4%/yr |
| Tax rate / discount rate | 25% / 12% |
| Depreciation | $20M/yr straight line, 5 years |
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
Next question
- How big could this product's revenue be by year three?Market Size to Revenue Forecast
- Which projects should we fund this year?Project Portfolio Selector
- How many rentals until an item pays for itself?Rental Break-Even Turns
- What pre-money valuation can your startup actually justify?What Is the Startup Worth to an Investor?
- When the company sells, what do you take home?Exit Payout Reality Check
- How much gross profit does each inventory dollar earn?What Does Each Dollar of Stock Earn in a Year?
Every model like this one, and the method behind them: Monte Carlo simulation.