Financial Aspects

Chapter VIII

Financial Aspect

A. Financial Assumptions

1. Prices of raw materials are based on 2014 level as follows:

Sweet red onions P 1,300/sack

Red pepper P 1,300/sack

Flour P 950.00/sack

Conch P 200.00/pail

Egg P 180.00/tray

Cooking oil P 250.00/gal

Pizza sauce P 149.50/gal

Cheese P 40.00/box

Hotdog P 23.00/pack

Powder Yeast P 35.00/kilo

2. Ending Inventory is assumed to be zero

3. Repair and maintenance would be 3% of the total cost of machinery and equipment

4. Depreciation method used is straight line

5. Property tax of building is 24%, machinery and equipment is 1% and vehicle is 4%. The total accumulated tax would be P 55,552.03

6. Interest rate on loan is 10% payable for 5 years

7. Selling price would be P 100.00 per box

8. Cost of electricity is P 8.79 kwh, total consumption in machineries, lights and all electrics is assumed to consume 1,500 kwh which can be translated to P 13,185.00 annually; water consumption is assumed to be P 3,500 annually. Total utilities would be P 16,685.00

9. Miscellaneous expenses is assumed to be P 5,500.00 annually

10. Legal and other proffessional fees will be P 5,500.00 annually

11. Fuel expenses would be P 5,500.00 annually

12. Selling expenses would be P 5,500.00

13. Income tax would be 30%

14. Sales returns and allowances is assumed be 2% of the total production each year

B. Project Cost

The total project cost would amount to P 16,666,337.54, 60% or P 9,999,802,524 of which will be loaned and the remaining 40% or P 6,666,535.016 of which will be provided by owner.

Table 12. Budgetary requirement of the project.

Item | Cost | Equity | Loan | Total |

1 | Pre-operating cost | 1,120 | 1,680 | 2,800 |

2 | Building | 80,000 | 120,000 | 200,000 |

3 | Machineries and Equipment | 78,081.20 | 117,121.80 | 195,203 |

4 | Vehicle | 56,000 | 84,000 | 140,000 |

5 | Working capital |...