12.  +How+do+you+perform+initial+viability+testing+using+the+economics+of+one+unit.

12. How do you: Perform initial viability testing using the economics of one unit.

Economics of One Unit (EOU)

Method for seeing if a business can be profitable

If one unit of sale is profitable, the whole business is likely to be profitable.

Selling price per unit – COGS per unit = Gross profit per unit

Economic Viability

Once the economic benefit and cost streams are derived, a project resource statement can be developed and the EIRR for the project can be calculated. Bank practice is to use 12 percent as the minimum rate of return for projects for which an EIRR can be calculated, although for projects with considerable nonquantifiable benefits, 10 percent may be acceptable.