CAPEX Investment Analysis for Optimizing Investment Decisions in New Product Development Projects

Abstract

Capital expenditure (CAPEX) investment decisions are important in New Product Development (NPD), where tooling and other project requirements can involve significant investment. This paper examines the use of CAPEX investment analysis to support investment planning and decision-making in an NPD environment at TVS Motor Company. The study is based on practical internship exposure under the NPD Finance function from 25 May 2026 to 7 August 2026. The analysis covered project and tooling costs, Bill of Materials (BOM), target cost, actual versus standard/target cost, contribution, per-unit cost, pricing, and investment evaluation using NPV, IRR, ARR and Payback Period. Historical project information was used as a reference for understanding cost patterns and current project requirements. An investment dashboard was developed to consolidate investment, cost, pricing and contribution information and improve visibility for project review. The case study indicates that combining historical data, structured CAPEX analysis, cost comparison and dashboard-based reporting can support more systematic investment planning and cost visibility in NPD projects. A second case examines product cost and contribution analysis using BOM, target cost, actual and standard costs, per-unit cost, pricing, GST, FOB and ex-showroom price information. The study demonstrates the practical role of Finance in converting project and cost information into decision-support insights.