Feasibility Study To Purchase Additional Plants

Feasibility Study to purchase additional plants / equipments (Grader and Compactor) A) Quantities:  Open Cut for Road Crossings  One Open Cut Road Crossing  No. of Crossings Crossings  Rate of Crossing Construction  Number of working Days

= 21,000 .00 m.l. = 15.00 m.l. = 21,000.00 / 15 = 1400 = 2 Crossings / day = 1400 / 2 = 700 Working days

B) Purchasing Cost:  Roller Compactor/Vibratory Compactor . . . (1)  Motor Grader . . . (2)  Purchasing Cost = (1) + (2)  Transportation to the Site  Costs (purchase & Transport) . . . (3)  

= 31,500.00 R.O. = 62,500.00 R.O. = 94,000.00 R.O. = 100.00 R.O. = 94,100.00 R.O.

Additional Costs: Licenses & governmental Expenses = 2 years x 250 R.O. = 500.00 R.O.

. . . (4)

 Total Purchasing Costs = (3) + (4) + (5) = 100,600.00 R.O.  Maintenance Expenses = 2 Years x 12 months x (200 R.O Grader+50 R.O Compactor) = 6,000.00 R.O. . . . (5)  Driver salary and accommodation = 2 years x 12 month x 250 R.O. = 6,000.00 R.O. . . . (6)  Interest Loss = 2.25% compound interest each 6 months for 2 years = 8,749.83 R.O.=~ 8,750.00 R.O. . . . (7)  Expenses = (3) + (4) + (5) + (6) + (7) = 115,350.00 R.O. . . . (8)  Depreciation per 7 years = CA= 7/ (7+1.5 T) = 7/11.5 = 0.608  Revenue Value = V2011 = 94000 ((0.75x 1 x 0.608 x 1 x 0.8) +0.25 x 0.7) = 94,000 (0.365+0.175) = 50,760.00 R.O.(Equi. Price of selling after two years) * * (See attachment)  Total Loss value = Purchasing Cost – Revenue Value = 115,350.00 R.O. -50,760.00 R.O. = 64,590.00 R.O. . . . (a) C) Rent Cost:  Grader Rent . . . (9)  Compactor Rent . . (10)

=

12.50 R.O/Hour

=

6.25 R.O/Hour

.

 Rent Cost per Hour = (6) + (7) = 18.75 R.O./Hour . . .(11)  Rent per one Working Day = 18.75 R.O. x 8 Hours = 150.00 R.O./Day  (b)

. . . (12)

Total Rent Costs = 700 days x 150.00 R.O.= 105,000.00 R.O.

...

Conclusion = (b) > (a) = Rent Costs > Purchasing Cost. Then Purchasing the Equipments is more beneficial to the Project.

Attachment (1) : Equation for Used Equipments Residual Value V = VR { ( 0.75 x Cd x Ca x Cu x Cg) + 0.25 x Cm } V : Residual Value VR: Price of the Equipment as New. Cd : Coefficient of the Equipment fabrication according to the following table:

Cd

Type still Fabricated 1

Type modified by the Manufacture 0.9

Type changed by the Manufacture 0.8

Obsolete Type 0.7

Ca : Depreciation coefficient = T / (T+1.5 t) Where T : virtual / assumed depreciation period & t : actual period of depreciation = Recent year – date of purchasing Cu : Coefficient of the working shifts according to the following table:

Cu

One shift working per day 1

Two Shifts Working per day 0.8

Three shifts working per day 0.6

Cg : Coefficient of the place / location of working according to the following table: Cg

North Africa 0.9

Cm : The Mechanical efficiency coefficient

Africa and Middle East 0.8

Far east 0.7