Feasibility Report
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INITIAL INVESTMENT Initial investments that we invest at the start of the business are given below. At the start of business we invested about Rs.1950,000. That includes all expense that is necessary for the beginners.
BEATLES MARRIAGE AGENCY INITIAL INVESTMENT, 14-MAY-2009
Shop Security Rs. 10, 00,000 Furniture & Fixture 50,000
Rs.
Installations & Equipment 50,000
1, Rs.
(Electricity & Telecom) Advertisement Expenses 00,000 New Inventory Purchased 50,000
Rs.
5, Rs.
2,
(Tents, Lights, Chairs And Decoration Accessories)
Total 19, 50,000
Rs.
Working Capital Following table will show the all necessary expenses beginning from the start of business till now. This table also show that which expense effect the most the capital investment. So by this data we analyses yearly expenses and their effect in our business.
Expenses
2006
2007
2008
2009
Rent
1,80,000 (15000/M)
1,98,000 (16500/M)
2,16,000 (18000/M)
2,34,000 (19500/M)
Utility Bills
24,000
28,800
33,600
38,400
Mobile Expense
36,000
36,000
36,000
36,000
Transport Charges
30,000
37,500
45,000
45,000
Food, Tea, etc
60,000
75,000
90,000
90,000
Salary
78,000
1,20,000
1,38,000
1,56,000
Others
60,000
60,000
60,000
60,000
Total
4,68,000
5,53,000
6,18,600
6,59,400
SALES As our business is the services providing agency (Marriage Agency). Due to this reason our sale will be related to event as shown below. Following table will show the money earn at the start of business till the now. By this table we are able to find out sale trend.
EVENT NAME
2006
2007
2008
2009
Marriages (Mendhi)
10,00000
20,00000
25,00000
25,00000
Marriages (Barat)
20,00000
30,00000
35,00000
35,00000
Marriages(Waleema)
25,00000
35,00000
45,00000
45,00000
Birthday Party
2,00000
2,00000
2,50000
3,00000
Event Management
1,00000
1,50000
1,60000
1,80000
others
60,000
60,000
60,000
60,000
Total
58,60,000
89,10,000
109,70,000
110,40,000
PROFIT Following table will show the profit earn again the sale. We estimate that we will earn at about 20% profit. Following table will show the exact fact and figure.
EVENTS SALE
2006
2007
2008
2009
Total Sale
58,60,000
89,10,000
109,70,000
110,40,000
Total Profit @ 20%
11,72,000
17,82,000
21,94,000
22,08,000
CASH FLOW Following table will show the scenario of cash flow.
END OF YEAR
INVESTMENT
2006
2007
2008
2009
CASH FLOW
19,50,000
11,72,000 17,82,000 21,94,000 22,08,000
DEPRECIATION @ 10% (MINUS)
195000
195000
195000
195000
BEFORE TAX CASH FLOW
977000
1587000
1999000
2013000
TAX @ 35% (MINUS)
341950
555450
699650
704550
AFTER TAX CASH FLOW
635050
1031550
1299350
1308450
DEPRECIATION @ 10% (ADDING)
195000
195000
195000
195000
NET CASH FLOW
830050
1226550
1494350
1503450
Net Present Value (NPV) NPV is the present value of an investment project’s net cash flows minus the project’s initial cash outflow. NPV=Total cash inflows –total cash outflows If NPV is +ve value the project is feasible
Year
2006
2007
2008
2009
NET CASH FLOW
830050
1226550
1494350
1503450
NPV Total
830050 (1+0.15) 721782
1226550 (1+0.15)2 927448
1494350 (1+0.15)3 982559
1503450 (1+0.15)4 859602
NPV=Total cash inflows total cash outflows Total cash inflows = 721782 +927448 + 982559+ 859602 = 3491391 3491391– 19, 50,000 = 1541391 Project Accepted (NPV +)
Internal Rate of Return (IRR) IRR is the discount rate that equates the present value of the future net cash flows from an investment project with the project’s initial cash outflow.
NET CASH FLOW IRR at 45% IRR at 50%
830050
1226550
1494350
1503450
572448
583377
490172
340108
442770
296978
553365
545133
If IRR is 45% 830050/ (1.45) + 1226550/(1.45) 2+ 1494350 /(1.45)3 + 1503450/(1.45) 4 = 572448 + 583377 + 490172 + 340108 = 1986177
If IRR is 50% 830050/(1.5) + 1226550/(1.5) 2+ 1494350 /(1.5)3 + 1503450/(1.5) 4 = 553365 +545133 + 442770 + 296978 = 1838246
Therefore IRR >
45% &
<
50%
Now finding the EXACT IRR by putting values in the formula 0.45 + (0.05)(36177) (147931)
Answer .46.22%
Profitability Index PI = cash Inflows/cash outflows 5053500 / 1950000
Answer.2.5
MODIFIED INTERNAL RATE OF RETURN (M.I.R.R) PV=1950, 000 FV=5054, 400
FV=P (1+r) N 5054400=1950, 000(1+r) 4
ANSWER.26.88%
PAYBACK PERIOD 1950,000
830,050+126,550+ (1950000-956600) 1494,350
Payback period 2+0.66=2.66 years
BEATLES MARRIAGE AGENCY INITIAL INVESTMENT, 14-MAY-2009
Shop Security Rs. 10, 00,000 Furniture & Fixture 50,000
Rs.
Installations & Equipment 50,000
1, Rs.
(Electricity & Telecom) Advertisement Expenses 00,000 New Inventory Purchased 50,000
Rs.
5, Rs.
2,
(Tents, Lights, Chairs And Decoration Accessories)
Total 19, 50,000
Rs.
Working Capital Following table will show the all necessary expenses beginning from the start of business till now. This table also show that which expense effect the most the capital investment. So by this data we analyses yearly expenses and their effect in our business.
Expenses
2006
2007
2008
2009
Rent
1,80,000 (15000/M)
1,98,000 (16500/M)
2,16,000 (18000/M)
2,34,000 (19500/M)
Utility Bills
24,000
28,800
33,600
38,400
Mobile Expense
36,000
36,000
36,000
36,000
Transport Charges
30,000
37,500
45,000
45,000
Food, Tea, etc
60,000
75,000
90,000
90,000
Salary
78,000
1,20,000
1,38,000
1,56,000
Others
60,000
60,000
60,000
60,000
Total
4,68,000
5,53,000
6,18,600
6,59,400
SALES As our business is the services providing agency (Marriage Agency). Due to this reason our sale will be related to event as shown below. Following table will show the money earn at the start of business till the now. By this table we are able to find out sale trend.
EVENT NAME
2006
2007
2008
2009
Marriages (Mendhi)
10,00000
20,00000
25,00000
25,00000
Marriages (Barat)
20,00000
30,00000
35,00000
35,00000
Marriages(Waleema)
25,00000
35,00000
45,00000
45,00000
Birthday Party
2,00000
2,00000
2,50000
3,00000
Event Management
1,00000
1,50000
1,60000
1,80000
others
60,000
60,000
60,000
60,000
Total
58,60,000
89,10,000
109,70,000
110,40,000
PROFIT Following table will show the profit earn again the sale. We estimate that we will earn at about 20% profit. Following table will show the exact fact and figure.
EVENTS SALE
2006
2007
2008
2009
Total Sale
58,60,000
89,10,000
109,70,000
110,40,000
Total Profit @ 20%
11,72,000
17,82,000
21,94,000
22,08,000
CASH FLOW Following table will show the scenario of cash flow.
END OF YEAR
INVESTMENT
2006
2007
2008
2009
CASH FLOW
19,50,000
11,72,000 17,82,000 21,94,000 22,08,000
DEPRECIATION @ 10% (MINUS)
195000
195000
195000
195000
BEFORE TAX CASH FLOW
977000
1587000
1999000
2013000
TAX @ 35% (MINUS)
341950
555450
699650
704550
AFTER TAX CASH FLOW
635050
1031550
1299350
1308450
DEPRECIATION @ 10% (ADDING)
195000
195000
195000
195000
NET CASH FLOW
830050
1226550
1494350
1503450
Net Present Value (NPV) NPV is the present value of an investment project’s net cash flows minus the project’s initial cash outflow. NPV=Total cash inflows –total cash outflows If NPV is +ve value the project is feasible
Year
2006
2007
2008
2009
NET CASH FLOW
830050
1226550
1494350
1503450
NPV Total
830050 (1+0.15) 721782
1226550 (1+0.15)2 927448
1494350 (1+0.15)3 982559
1503450 (1+0.15)4 859602
NPV=Total cash inflows total cash outflows Total cash inflows = 721782 +927448 + 982559+ 859602 = 3491391 3491391– 19, 50,000 = 1541391 Project Accepted (NPV +)
Internal Rate of Return (IRR) IRR is the discount rate that equates the present value of the future net cash flows from an investment project with the project’s initial cash outflow.
NET CASH FLOW IRR at 45% IRR at 50%
830050
1226550
1494350
1503450
572448
583377
490172
340108
442770
296978
553365
545133
If IRR is 45% 830050/ (1.45) + 1226550/(1.45) 2+ 1494350 /(1.45)3 + 1503450/(1.45) 4 = 572448 + 583377 + 490172 + 340108 = 1986177
If IRR is 50% 830050/(1.5) + 1226550/(1.5) 2+ 1494350 /(1.5)3 + 1503450/(1.5) 4 = 553365 +545133 + 442770 + 296978 = 1838246
Therefore IRR >
45% &
<
50%
Now finding the EXACT IRR by putting values in the formula 0.45 + (0.05)(36177) (147931)
Answer .46.22%
Profitability Index PI = cash Inflows/cash outflows 5053500 / 1950000
Answer.2.5
MODIFIED INTERNAL RATE OF RETURN (M.I.R.R) PV=1950, 000 FV=5054, 400
FV=P (1+r) N 5054400=1950, 000(1+r) 4
ANSWER.26.88%
PAYBACK PERIOD 1950,000
830,050+126,550+ (1950000-956600) 1494,350
Payback period 2+0.66=2.66 years
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