Notes To Financial Projections

Notes/Assumptions Used in the Financial Projections 1. The business will operate for 26 days per month 2. It is assumed that all expenses will increase by 10% per annum. 3. It has a full capacity of 200 kilograms per day. For year one, it will operate at 60% or 120 kilograms per day and to increase by 10% per annum. 4. Purchases – It is assumed that there will be a one month raw material inventory; accounts payable is equivalent to one month raw material supply. 5. Direct Labor - Please refer to production plan. Overhead Expenses: 6. Electricity and Water – As shown in the production plan, it is assumed at P48,000.00 per annum. 7. Depreciation – For building and machinery and equipment, it is assumed at 20% of the value per annum. 8. Repairs and maintenance is pegged at P6,000.00 for the first year. 9. Transportation – assumed P6,000.00 10. Miscellaneous – pegged at P12,000.00 Marketing, Management and Operating Expenses 11. Salaries and Wages – please refer to the organization and management plan. It is assumed at P102,000.00 for the first year. 12. Communication is assumed at P24,000.00 on the first year. 13. Office Supplies – assumed at P6,000.00 for the first year. 14. Depreciation - delivery van and office equipment assumed to last for 5 years. 15. Amortization of Pre-Operating Expenses – The amount of P10,000.00 will be amortized for 5 years. 16. Marketing expenses- P24,000.00 for the first year. 17. Gasoline Expense is pegged at P5,000.00 per month or P60,000.00 for the first year. 18. Loan Amortization- the loan is assumed to be paid in 5 years at 9% per annum .