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Submitted to: MR.DR. Y. P SINGH FACULTY OF I.I.S.E LUCKNOW
Submitted by: SWAPNIL SRIVASTAVA PGDM –2nd Year ENROLLMENT NO. 1085
site selection. surveys and literature review.EXECUTIVE SUMMARY: The purpose of this project is to serve as an overall summary of the project and to determine the feasibility of opening a fast food Restaurant which is very much popular now days in the city of Navab’s in Kapoorthala. It will answer questions such as "will it work or won't it?" and "will it be profitable?" The report summarizes the project expectations. The feasibility study is designed to discover if a business option is "feasible" or not. competition and financial analysis through observational research. Most importantly the feasibility study of the proposed FAST FOOD RESTAURENT will define about market. Lucknow. It helps to narrow the scope of the project to identify the best strategy. the process of opening up a business and the project results. SWAPNIL SRIVASTAVA 2 . Alliganj.
opinions.YP SINGH International Institute for Special Education. Lucknow for his guidance and sincere efforts towards bringing in years of his vast industrial experience into this project. ideas and experiences which have significantly improved this Project Report.ACKNOWLEDGEMENT I am extremely grateful to all those who have shared their views. I am very thankful to all the respondents and the employees for their cooperation in the course of my study. Mr. I would like to express my sincere thanks to. A special thanks to my friends and family for their encouragement and help in the successful completion of the study. SWAPNIL SRIVASTAVA TABLE OF CONTENT 3 .
EXECUTIVE SUMMARY ACKNOWLEDGEMENT INTRODUCTION – PROJECT BACKGROUND – PRODUCT/SERVICE ANALYSIS – OBJECTIVE OF THE STUDY – FIVE YEARS YEARS VALUE CONCLUSION BIBLIOGRAPHY CALCULATION OF NET PRESENT PROJECTED CASH FLOW FOR FIVE FEASIBILITY ANALYSIS CONTENTS OF FEASIBILITY ANALYSIS WORKING ASSUMPTIONS STATEMENT OF INITIAL INVESTMENT COST OF PROJECT CALCULATION OF DEPRECIATION FOR 4 .
5 .INTRODUCTION PROJECT BACKGROUND Name of company: Owner: Type of business: Place: SWADISTH SWAPNIL SRIVASTAVA FAST FOOD RESTAURENT Kapoor Thala. Lucknow. Aliganj.
Anniversaries. Location and Selection. Hence very limited competition for FOOD & FUN. New Year Party. Food and Party. Kitty Party. Lucknow. New Year Party. ADVANTAGES In Lucknow there are very few places which provide a complete blend of good food and party place especially in Aliganj. The FOOD & FUN believes that the business will compete very favorable in terms of Price. Corporate Parties etc. The first area is Fast Food and the second area is a Place to organize various Parties like Birthday Party. These two operations will involve the core business activities of FOOD & FUN. 6 .PRODUCT/SERVICE ANALYSIS The businesses intend to serve three areas. Get together. Despite of ups and down in the market people will always move out to have Fun.
3. Lucknow.OBJECTIVE OF THE STUDY 1. To find out the initial cost of establishment of the project 5. 4. Pricing strategy. To identify the feasibility of such project in Kapporthala. 7 . Find Market segment. Aliganj. To calculate the Pay back period of initial investment 6. To calculate NPV & IRR. 2.
FEASIBILITY STUDY A feasibility study is a preliminary study undertaken to determine and document a project's viability. The term is also used to describe the preliminary analysis of an existing system to see if it is worth upgrading all or a part. Also known as feasibility analysis. since it has been estimated that only one idea in fifty is commercially viable. it will — before the real work of the proposed project starts — be used to ascertain the likelihood of the project's success. It is an analysis of possible alternative solutions to a problem and a recommendation on the best alternative. 8 . If it indeed leads to a project being approved. The results of this study are used to make a decision whether or not to proceed with the project. A feasibility study is an important part of creating a business plan for a new enterprise. can decide whether an order processing be carried out by a new system more efficiently than the previous one. The research and information uncovered in the feasibility study will support the detailed planning and reduce the research time. The term feasibility study is also used to refer to the resulting document. the next logical step is to proceed with it. for example. If a project is seen to be feasible from the results of the study. It.
COMPONENETS OF FEASIBILITY Market Analysis Technical Analysis Financial Analysis Economic Analysis Ecological Analysis MARKET ANALYSIS 9 .
for which a study should be conducted. I will be able to answer questions such as: – What trends are emerging in the food service industry? – – – What are the strengths and weaknesses of my competition? Is my location suitable? Does my concept fill a niche in the market? 10 .Market Analysis Components Industry Trends Location and Facility Area Characteristics Competition Knowing Your Customer Projected Sales The market is full of opportunities for such kind of businesses where there is little competition and at the same time service industry is booming at the faster pace there is not much time to cook food daily and arrange parties at home. Mac Donald’s. Looking these factors Food & Fun can definitely go for entry in this sector but only after identifying need of the customers. That is why there is huge demand for a professional party organizer which provides a complete solution i. 0522.e. By conducting a market analysis. Aryan’s. a party place along with good food. Narula’s. The FOOD & FUN will surely going to face the competition from the existing competitors like Royal Café. Pizza Hut. and other High ways Dhaba also.
Location i. Priority sectors like quality and freshness of food. WORKING ASSUMPTIONS 11 . ECONOMIC AND ECOLOGICAL ANALYSIS: Economic Analysis is concerned with judging a project from the social point of view.e. The quality of service. The proposed Restaurant cum Party House will not have a great implication on the environment but it cannot be denied that it will somehow contribute to the environment pollution due to release of waste and garbage and also the noise pollution due to late night parties. machinery to keep the place clean.– What is the potential number of customers I can serve per year? TECHNICAL ANALYSIS: Technical Analysis seeks to determine whether the preliminary test have been conducted & whether the prerequisites for the successful commissioning of the project have been considered and it has been found that the Restaurant cum Party House FOOD & FUN would be requiring an automatic plant for the preparation of food. vehicle to bring raw material for the preparation of food etc. tax incentives. computer & printer for bill payments. commercial place. Through providing regular checks. proper method for removing waste and garbage and minimizing the noise due to late night parties the long term impact on the environment can be reduced and pollution can be minimized. Gov.
12 . it has been assumed that the revenue in the first year will be Rs. – Working Capital Margin will be recovered to its book value at the end of the life of project. – The entire project is financed through owner’s capital. 16. – It is assumed that the life of the project is 5 years.000 and there after it increase at the rate of 10% per annum and the expenses will increase at the rate of 5%.The following assumptions are necessary for completing the project:– It is assumed that the minimum cash balance required should be sufficient to meet the operating cost for the initial 2 months. – The rate of return required by the owner is 10%. – On the basis of market survey. 00. – It is assumed that the depreciation will be charged on WDV (Written down Value Method). – It is assumed that the salvage value will be equal to the book value.
STATEMENT OF INITIAL INVESTMENT Preliminary and pre-operating expenses: Processing and registration fee paid at municipal corporation 80000 Registration with sales tax & income tax department 18000 Total 98000 COST OF PROJECT 1. Building 1500000 13 .
3 151381. 5. Cooking Machines Computer/Printer Generator Furniture & Fixture Refrigerator & Audio System Working Capital Preliminary expenses TOTAL and 290000 22000 12000 70000 17000 45000 pre-operating 98000 2054000 CALCULATION OF DEPRECIATION FOR FIVE YEARS A. 8.9 31428.45 22707. Cooking Machines (15%) Opening Balance Depreciation I II 290000 246500 43500 36975 III IV V 209525 178096. Utensils. 7. 4. 6. Utensils.75 26714..C. A..C.29 14 . 3.2.
5 43837.6 4406.3 151381.7 15 .4 1762. & 246500 209525 I 70000 7000 63000 II 63000 6300 56700 178096.13 36321.06 30393.66 180195.13 1566. Rs.02 8874.13 IV 7344 2937.375 10440. Salvage Value Rs.9 128674.7 41334.6 III 56700 5670 51030 IV 51030 5103 45927 V 45927 4592.84 V 8874.5 III 12240 4896 7344 III 12282.4 IV 10440.117 7542.3 I 34000 13600 20400 I 17000 2550 14450 66650 II 20400 8160 12240 II 14450 2167.994 53602.5 12282.5 1842.111 1331.Balance end of the year Furniture & Fixture (10%) Opening Balance Depreciation Balance end of the year Computer/Printer Generator (40%) Opening Balance Depreciation Balance end of the year TV & Refrigerator (15%) Opening Balance Depreciation Balance end of the year TOTAL DEP.111 V 4406.56 2643.
3 1062178 III 1936000 198450 43837.1 30393.5 1517398 0 1517398 455219.9 1185599 IV 2129600 208372.7 16 .9 1319435 V 2342560 218791. No.66 2093375 0 2093375 628012.7 1720952 45000 of 0 I 1600000 180000 66650 1353350 0 1353350 406005 947345 II 1760000 189000 53602.13 1693713 0 1693713 508113.PROJECTED CASH FLOW FOR FIVE YEARS S.5 36321.06 1884906 0 1884906 565471.6 1465363 180195. 1 2 3 4 5 6 7 8 9 Particulars Revenue Expenses Depreciation EBIT Interest EBT Tax @ 30% PAT Salvage Value Recovery Working 10 Capital Initial 11 12 13 14 Investment Operational Cash Flow Terminal Benefit Projected Cash Flow 1013995 1115781 1229436 1355756 2054000 1013995 1115781 1229436 1355756 1495756 225195.
CALCULATION OF NET PRESENT VALUE Cash Yrs 0 1 2 3 4 5 Flow -2054000 1013995 1115781 1229436 1355756 1720952 PV Factor @ Present 10% 1 0.6 1068711 4760000 Cumulative Value 942510.826 0.751 0.4 924625.3 1864145 2787452 3712077 4780789 Present 17 .909 0.621 Value -2054000 921721.5 921635.1 923306.682 0.
Initial Investment = 2706000 Benefit cost ratio = (Present value-Initial Investment)/ Initial investment = 1.3174 Pay Back Period = In the Third Year IRR 49% CONCLUSION The Net Present Value (NPV) is positive and the Internal Rate of Return (IRR) is greater than the cost of capital. Economy and Ecological indicates that the project of FAST FOOD RESTAURENT is feasible. 18 .Net Present Value = Total Benefit . This clearly shows that the project is financially viable.3174 Net Benefit cost ratio (NBCR) = BCR-1 = 0. Technology. The analysis done about the Market.
www. IISE. Singh.BIBLIOGRAPHY 1. 2.com Class notes by Dr. P.google. Y. 19 . 3. Lucknow.com www.wikipedia. Faculty.
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