Feasibility study PDF

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Feasibility study...

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FINANCIAL ASPECT A. Financial Assumption This feasibility study were all base on the projected demand and proponents’ analytical thinking in relation to the weight of the data being gathered with diligence. The assumptions are as follows 1. The study is projected for 5 years 2. The business operation will commence on January 1, 2021. The preparation of the financial statements every calendar year ending December. 3. The proposed company will operate for 10 hrs. per day, 7 days a week for a total of 365 per year. 4. The company will have an initial investment of 18,800 pesos derived from the 25% contribution of each partner. 5. The selling price shall be based on the product costing which is composed of raw materials, direct labor and overhead cost and VAT. 6. All sales shall be paid in cash. 7. The sales are expecting to increase at 15% annually. 8. The company shall use straight line method of depreciation for Property, Plant and Equipment(PPE) using the following estimated useful life and residual value (5% of the cost of asset) 9. Executive chef and assistant cook shall be accounted as direct labor cost; food attendant and dishwasher will be included in indirect labor the rest will be included in the operating expense. 10. 60.26% of utilities will be allocated to overhead cost while the rest shall be included in the administrative and selling expense. 50% of the depreciation of building will be allocated to overhead cost and 50% for administrative and selling expense. And rent expense shall be equally divided to operating expense and overhead cost. 11. Repairs and Maintenance shall be 4% of the annual depreciation of the assets. 12. Salaries and supplies Expense shall increase annually at 3%. 13. The Insurance Expense for property will be assumed at 60,000 pesos annually. 14. The cost of raw materials will be based on the total sales times food cost before direct labor and overhead costs percentage.

B. TOTAL PROJECT COST (INITIAL COST OF IVESTMENT) The total project cost refers the total cost and expenses incurred by the business to start its operations. It includes the following components.

C. Source of Financing Being in a business field, financing is needed to start and ramp it up to profitability. In this case partners invest money equally to have an initial capital of P18,800,000.

Partners Input your name Input your name Input your name Input your name

Percentage 25% 25% 25% 25%

Contributions P 4,700,000 P 4,700,000 P 4,700,000 P 4,700,000

Total Contributions

P 18,800,000...