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Submitted to:

Janice S. Cataag

Submitted by:

Melanie L. Quirol

Jayson N. Jaron

March 14, 2012


The success of this Feasibility Study cannot be truly defined without the

presence and willingness of several people who lent their hand to help the

authors. The authors are very grateful and therefore they wanted to extent their

heartfelt thanks and appreciations to the following:

To our subject instructor, Mrs. Janice S. Cataag, for teaching us on how to

make a Feasibility study.

To Mr. John Paul Sindangan, for giving us some information on how to

make a balance sheet.

To the author’s beloved parents for their everlasting moral, financial and

spiritual support the author’s journey in making this study.

To The author’s classmates and fellow mates for their exchanging of

ideas, encouragement and good companionship during the frustration moments.

And to those who were not mentioned, a heartfelt thanks.

Everything would not be realized without the presence of the almighty

Father for His unending love, support, blessings and guidance to the author’s

quest of life.


A. Name of the enterprise

JM CASSAVA PRODUCTION will be the enterprise name. JM comes from

the first letter of the proponents’ name which is Jayson and Melanie. The

proponents intended to choose this name which symbolizes fairness in the

B. Location
The proposed site will be established at Purok Gemelina, Homelot,

Pangasinan, Pantukan, Compostela Valley Province. The area is accessible to

transportation facilities that are essential for the easy flow of all the transactions

of the business. Electrical power and water supply exists in the project site.
C. Project long Range Objectives

The proponents expected that after five or more years, the business will

become more productive, could generate more income and pursue more flour

processors in the entire Philippines upon making them one of the biggest

producers of good quality of cassava.

D. Highlights of the Project

1. History
This project was built-up due to its existing demand in the market as a

substitute food in times of rice shortage.

2. Nature of the Industry

Cassava is one of the most in demand product in the local market. Aside

from being a promising substitute as staple food, it can also divert into new

products like flour and kakanins. There will be more demand for this product

because it is not only for food consumption but it also used to cure some

diseases. It can also provide employment to individual who certainly need job.

3. Project Potential

The project has a great potential because of its many uses. It serves as

human food, as starch, and an animal ingredient in making feeds.

4. Investment cost

The proposed project will need the total amount of 980,285.814. This

amount will be used in purchasing raw materials, tools, equipments and office

supplies. It also includes Land rental, transportation cost, labor and other


5. Mode of Financing
The proponent will acquire loan from the Rural Bank of Montevista (RBM),

Pantukan Branch since it facilitates credit with an interest of 5%.

E. Major Assumption and Summary of Finding and Conclusion

1. Market Feasibility

Cassava production has an edge in terms of market to the high demand of

flour processor and other uses of this product. This product is a promising

substitute as a staple food in times of rice shortage. Aside from the fact that there

were only producer of the product since the flour processing industry are far from

the area of production.

2. Technical Feasibility

This project will follow the recommended agronomic management

practices in growing cassava. In this regard, all the necessary procedures and

management should be followed and applied. The production process involve land

preparation, preparation of planting materials, planting, crop protection, weeding,

application of fertilizer, harvesting and distribution.

In addition, proper care and maintenance of the farm area are needed in

order to attain higher yield. Proper amount of fertilizer and pesticides will be

given attention in order to prevent pest and diseases infestation.

3. Financial Feasibility
The total investment of the project will be 980,285.814 of which Php

600,000.00 will be loaned from the Rural Bank of Montevista (RBM), Pantukan

Branch with an interest of 5%. The remaining 380,285.814 will be the

proponents’ investment. The collateral of this loan will be the land title of one of

the proponent.

4. Socio-Economic Feasibility

The project has a positive effect to the society as well as in the economy

as whole. It can provide financial opportunities to the neighbouring households.

5. Management Feasibility

Supervision and leadership are necessary to make the venture viable. One

of the proponents will assumed as the manager of the project. He will conduct

regular monitoring of activities in the farm and will keep tracking behaviour of the

project in its entire operation. He will receive an amount of 15,000.00 every


The labourer does the activities in the production process. The contractual

worker will only be hired during the preparation of the site and during harvesting

period. On the otherhand, the caretaker will serve as the regular worker in the



A. Product Description

Cassava (Manihot utilissima) is locally known as “Balinghoy or Kamoteng-

kahoy”. It is a woody shrub, the root of cassava is long and tapered with a firm

homogeneous flesh encased in detachable rind about 1mm thick, rough and

brown on the outside. The flesh can be chalked-white or yellowish. Cassava root

are very rich in starch and contain significant amount of calcium (50mg/100g) ,

phosphorus (40mg/100g) and vitamin C (25mg/100g). It is cultivated as annual

crop in tropical region for its edible starchy tuberous roots as a major source of

carbohydrates. The bitter variety of Manihot is used to treat diarrhea, headache

and pain and also cooked and eaten. It is also use to treat irritable bowel


Indeed, cassava is the third largest source of carbohydrates for human

food consumption in the world.

B. Demand Analysis
Historical Values of the Demand of Cassava for the Past Ten Years
Year Demand %increase/decrease
2001 1,852,371.51 N/A
2002 1,815,917.88 -1.97
2003 1,784,489.5 -1.73
2004 1,876,015.44 5.13
2005 1,890,347.76 0.76
2006 2,004,668.88 6.05
2007 2,027,685.84 1.15
2008 2,047,035.36 0.95
2009 1,911,535.44 -6.62
2010 1,967,967.84 2.95

C .Supply Analysis
Historical Values of the Supply of Cassava for the Past Ten Years
Year Supply %increase/decrease
2001 1,652,035.88 mt N/A
2002 1,625,738.73 mt -1.59
2003 1,622,241.72 mt -0.22
2004 1,640,519.58 mt 1.13
2005 1,677,563.82 mt 2.26
2006 1,756,856.13 mt 4.73
2007 1,871,137.81 mt 6.50
2008 1,941,574.59 mt 3.76
2009 2,043,719.41 mt 5.26
2010 2,101,454.16 mt 2.82

D. Demand-Supply Analysis
Year Demand Supply Gap
2001 1,852,371.51 1,652,035.88 200,335.63
2002 1,815,917.88 1,625,738.73 190,179.15
2003 1,784,489.5 1,622,241.72 162,247.78
2004 1,876,015.44 1,640,519.58 235,495.86
2005 1,890,347.76 1,677,563.82 212,783.94
2006 2,004,668.88 1,756,856.13 247,812.75
2007 2,027,685.84 1,871,137.81 156,548.03
2008 2,047,035.36 1,941,574.59 105,460.77
2009 1,911,535.44 2,043,719.41 -132,183.97
2010 1,967,967.84 2,101,454.16 -133,486.32

E. Price Analysis

The price will depend on the supply and demand of cassava. The higher

the demand, the lower the supply therefore the price is higher. The lower the

demand, the higher the supply therefore the price is lower.

F. Factors affecting the Market

1. Competition

Competition is one of the factors that will affect the market. If there will

be more competitors, the production will be affected.

2. Season

Season depends upon the supply and demand of cassava. The lower the

supply of cassava, the price will increase.

G. Marketing Programs
1. The Market

The product which is cassava will be sold directly to the local market and

to the ultimate consumer.

2. Proposed Price

The proposed price of cassava will be Php 7.00 per kilo. It is assumed to

be fixed from the first year until its fifth year of operation.

3. Product Management

Harvested cassava crop will be brought to the storage house for cleaning.

It will be placed in sacks and will be transported to the designated market outlets.

4. Distribution System

The products are handled down directly to the buyer. No middleman

involve during the marketing process. The producer will be the one to deliver the

products. Payment will be done by cash or delivery basis.


Fig.1. Distribution Channel of Cassava Production

A. The Product

The product is cassava or locally known as “kamoteng-kahoy” or

balanghoy. It is a perennial shrub which sometimes reaches the size of all small

trees. Its stems vary in color from pale to dirty white or brown marked by

numerous node formed by scar left by fallen leaves. Pale to dark green leaves are

fan-shaped with5 to 9 lobes. Roots of cassava plant are few and swallow and

some become storage roots, these are clustered around the base of the plant and

extent about 60 cm all sides. It is for this root which contain from 15% sparely.

This is cultivated under favourable condition. A single root may weigh as 4 kilos.

The number of root per plant at harvest varies from 2 to 7 each averaging 27 cm

long from 4.5 to 7.4 cm in diameter.

Cassava is essential part of diet more than a half billion people. Cassava

roots are high in calories and leaves are good source of protein and vitamins A

and B subsistence farmer have long appreciated benefit of cultivating cassava.

The plant can grow in poor soil on marginal lands with minimal amount of

fertilizer, pesticides and water because the root can be harvested any time from 8

to 24 months after planting. They are important safeguard against unexpected

food shortage.

B .Product Process

1. Site selection

Cassava is a tropical and sub-tropical plant. It grows with more or less

evenly distributed rainfall through the year. This study will select an open field

area with clay loam soil. The selected area will not prone to water logging. This

cassava crops will be planted at rainy season.

2. Land Preparation

A total of herbicide round up will be applied at the rate of 4 to 5 hectare,

ten days before land preparation.

There is no clear rule as to how many plowing or harrowing, but it

depends on the kind of soil and the intensity of weed population. In any case,

plow the soil to a depth at least 16 cm to provide good soil conditions of the root

development and better water retention in the soil.

3. Preparation of planting Materials

In preparation of planting materials, this production will select only fresh,

mature and healthy stems. It is fresh when latex comes out within six seconds

after cutting. It is healthy when it is pest free and diameter of stem is not less

than 1.5 cm and at least 8 months old.

4. Planting

The planting distance of cassava is 50 cm between hill and 75 cm

between rows with two seeds pieces/ hill and at a depth of 25 cm. Seed pieces

are laid out flat during the dry season, slanting during the rainy season.

Replanting maybe done 6-10 days after planting.

5. Crop Protection

The cassava is infested with fish scale. The population of the pest will

increase rapidly causing yield losses reaching as high as 20%. The most

immediate form of control will be the use of chemical pesticides. However in this

production, the treat of chemical pesticides to planting materials will be at

minimal amount because this may result to a dangerous side effect to a node.

The cutting stored for more than 5 days will not be used anymore because it is

already infested with pest.

6. Controlling of rodents

Clean the surrounding thoroughly and continue baiting with chronic

rodenticides to prevent the build up and increase of the population up to 7 days

before harvest.

7. Keeping weeds under control

Shallow cultivation should be done as soon as the weeds have

germinated, pass between the furrow a 60 cm wide wood or soike-tooth harrow

to control weeds. This cultivation may do two times during the first 30 days after

planting. Selective hand weeding in the furrows should also be done in the same

period to control further growth of the weeds.

8. Fertilizer Application

Apply fertilizer based on the soil analysis. First application will be at

planting and the second application will be 2 months after planting.

9. Harvesting

Cassava is highly perishable crops. It started to deteriorate as early as 1

to 3 days after harvest. This crop will be harvested at full maturity which will be
7 to 8 months after planting. It will not be harvested during heavy rain or when

soil is too wet. This is because roots will have high water content which will be

difficult to store. This may also result to low yield and poor eating quality. On the

other hand, leaving the roots long in the soil exposed them to pest.







Fig.2. Production Process

C. Project Area

The proposed area will be located at Purok Gemelina, Homelot,

Pangasinan, Pantukan, Compostela Valley Province. It is near along the highway.

The area is 1 hectare (10, 000) and it will be rented ₱18,000.00 per year.

D. Project Location




50x70cm 50x70cm
F. Raw Materials and Supplies

Table 1. Schedule of Purchased Of Tools and Equipment

Description Unit Quantity Cost/Unit Total cost

Shovel Pcs 3 400.00 1,200.00
Knapsack sprayer Pcs 4 1,800.00 7,200.00
Slashing bolo Pcs 3 2,500.00 750.00
Tumbling bolo pcs 4 500.00 2,000.00
Total ₱11,150.00
Table 2. Schedule of Purchased of Office Supplies

Items Unit Quantity Cost/Unit Total cost

Ledger Pcs. 1 25.00 25.00
Journal Pcs. 1 25.00 25.00
Record Book Pcs. 3 50.00 150.00
Yellow pad Pcs. 5 18.00 90.00
Pilot pen Pcs. 10 21.00 210.00
White ink Bottle 1 19.00 19.00
Pencil Pcs. 10 7.00 70.00
Ruler Pcs. 2 10.00 20.00
Paper clips box 1 13.00 13.00
Stapler Pcs. 2 20.00 40.00
Calculator Pcs. 2 150.00 300.00
Folders Pcs. 5 5.00 25.00
Envelope Pcs. 5 4.00 20.00
Total ₱1,007.00

Table 3. Bill of Materials on Farm Shed

Description Unit Quantity Price/Unit Total Cost

Post (coco bdft 48 12 576
lumber) 4x4x6
Girt 4x4x8 Bdft 10.66 12 127.92
4x4x12 Bdft 16 12 192

Top cord 2x3x8 bdft 12 12 144

Bottom cord bdft 16 12 192
Braces 2x3x12 bdft 4 12 48
Purlins 2x3x12 bdft 46 12 1,152
Lumber sticks bdft 45.38 12 544.56
Horizontal bdft 48.01 12 576.12
studding 2x2x8
Vertical bdft 42.67 12 512.04
G.I sheet Pcs. 12 260 3,120
gauge 31 (8ft)
G.I nails Kilo 1 80 80
Plain G.I sheet Kilo 2 280 560
Common nails Kilo 3 60 180
#3 kilo 3 60 180
#2 kilo 3 60 180
Amakan 4x8 Pcs. 10 120 1,200
Hollow Blocks Pcs. 175 7 1,225
Cements Bags 10 205 2,050
Corrugated Pcs. 22 135 2,970
bars 8mm
Mixed sand Load 1 700 700
Labor cost 5,711.174
Total Cost ₱22,228.814

Table 4. Schedule of Purchase of materials and supplies for year 1

Description Quantity Unit Cost No. Of Total

Application cost
1. Planting
Cassava 890 bundle 300/bundle 1 267,000
2. Herbicides
Round-up 2 galloon 1,000/gal 2 4,000
3. Pesticides
Bavistin 50 5 Pack 240/pack 1 1,200
4. Fertilizer
14-14) 4 Bags 1,300/bag 1 5,200
20 Bags 300/bag 1 6,000

5. Other
Big Basket 30 Pcs. 50/pc - 1,500
Weighing 1 Pc. 12,500/pc - 12,500
Total Cost 297, 400

Table 5. Schedule of Purchase of materials and supplies for year 2

Description Quantity Unit Cost No. Of Total
Application Cost
1. Pesticides
Bavistin 50 5 pack 240/pack 1 1,200
2. Fertilizer
Complete (14- 4 Bags 1,300/bag 1 5,200
14-14) 6,000
Organic 4 bags 300/bag 1

Total Cost 12,400

G. Waste Management Disposal

A propose project will provide a 6x6 m compost pit. Segregation of

garbage should be recommended. Only the biodegradable will put on compost

pit while the non biodegradable will put in sacks.

H. Labor Requirements

Table 6

Direct Labor Labor Cycle Labor Cost Total cost

1. Land
Plowing Contractual 1 3,500/ha 3,500
Harrowing Contractual 2 2,500/ha 5,000
Furrowing Contractual 1 1,500/ha 1,500
Off-Barring 3MD w/ 2 300/day 1,800
Hilling-up 3MD w/ 1 300/day 900

2. Planting 6 MD 1 150/day 900

3. Harvesting 6 MD 1 150/day 900
4. Hauling 6 MD 1 150/day 900
5. Caretaker 4MD 150/day 216,000
6. Office 500
7. Furniture’s 2,300
8. 12,000
9. 1 person 180,000
Management (manager)
Total Cost ₱426,000
Table 7. Schedule of Labor Requirement (Year 2-5)

Direct Labor Required Cycle Labor Cost Total Cost

1. Land preparation
Plowing contractual 1 3,500/ha 3,500
Harrowing contractual 2 2,500/ha 5,000
Furrowing contractual 1 1,500/ha 1,500
Off-baring 3 MD’s w/ 2 300/day 1,800
Hilling-up 3 MD’s w/ 1 300/day 900
2. Planting 6 MD’s 1 150/day 900
3. Harvesting 6 MD’s 1 150/day 900
4. Hauling 6 MD’s 1 150/day 900
5. Caretaker 4 MD’s 150/day 216,000
6. Office Supplies 500
7. Transportation 12,000
8. Management fee 15,000/mont 180,000
Total Labor Cost ₱423,900
I. Estimated Cost of Production on Its First Year in Operation


Fixed cost

Farm building 22,228.814

Furniture’s 2,300

Direct labor 246,000

Administrative Salary 180,000

Land Rental 18,000

Tools and equipment 11,150

Total Fixed cost 479,678.814

Variable cost

Office Supplies 1,007

Materials and supplies 297,400

Electricity 10,000

Repair and maintenance 10,000

Water supply 10,000



A. Major Assumptions
1. Land rental will be fixed for five years at ₱18,000.00
2. Management fee will be fixed for five years at ₱180,000.00
3. Office supplies will be fixed for five years at ₱1,007.00
4. The area has a capacity of 26,666 hills in one hectare with spacing of

5. Selling price of cassava root crop is ₱7.00 per kilo and it will be fixed for

five years of the operation.

6. Price of input requirement such as labor, supplies and materials will be

fixed for five years of operation.

7. There will be 159,996 kilos expected yield of cassava on the first year of

8. Tax is 10 percent of the net income.
9. The maturity of cassava will star on its 8th month during the first year of



Projected Cash Flow

(Year1 to Year5)
Cash flow from Year1 Year2 Year3 Year4 Year5

operating activity
Net Income 181,723.5 455,728.5 461,128.5 461,938.5 462,708
Depreciation - 445.76 445.76 445.76 445.76
Net cash provided 181,723.5 456,174.26 461,574.26 462,384.26 463,153.76

by operating

Cash flow from

investing activity
-Farm building 22,228.914 -
Net cash provided 22,228.814

by investing

Cash from

financing activities
-investment 380,285.814
Loan 600,000
Loan repayment 120,000 120,000 120,000 120,000 120,000
Net cash provided

by financing 860,285.814

Net income cash 1,019,780.5 367,174.26 341,574.26 342,384.26 343,153.76
Cash balance 0 1,019,780.5 1,335,954.76 1,697,529.02 2,039,913.28

Cash balance end 1,019,780.5 1,355,954.76 1,697,529.02 2,039,913.28 2,383,067.04

Projected Income Statement

(Year1 to Year5)

Year1 Year2 Year3 Year4 Year5

Sales 1,119,972 1,119,972 1,119,972 1,119,972 1,119,972


Tools and 11,150

Materials and 297,400 12,400 12,400 12,400 12,400

Direct labor 246,200 246,200 246,200 246,200 246,200
Land rental 18,000 18,000 18,000 18,000 18,000
Administrative 180,000 180,000 180,000 180,000 180,000
Interest 150,000 144,000 138,000 137,000 136,000

Furniture’s 2,300 - - - -
Office supplies 1,007 1,007 1,007 1,007 1,007
Transportatio 12,000 12,000 12,000 12,000 12,000

Total 918,057 613,607 607,607 606,707 605,852

operating cost
Net income 201,915 506,365 512,365 513,265 514,120

before tax
Less:10% 20,191.5 50,636.5 51,236.5 51,326.5 51,412

income tax
Net 181,723.5 455,728.5 461,128.5 461,938.5 462,708


Projected Balance Sheet

(Year1 to Year5)

Year1 Year2 Year3 Year4 Year5

Current asset 1,019,780.5 1,355,954.76 1,697,529.02 2,039,913.28 2,383,067.04
Fixed asset
Farm building 22,228.814 22,228.814 22,228.814 22,228.814 22,228.814
Depreciation - 445.76 891.52 1,265.28 1,711.04
Total Fixed 22,228.814 21,783.054 21,337.294 20,963.534 20,517.774

Total asset 1,042,009.314 1,377,737.814 1,718,866.314 2,060,876.814 2,403,584.814
Liability and

owners equity
-Loan 600,000 480,000 360,000 240,000 120,000
Loan 120,000 120,000 120,000 120,000 120,000

Total liability 480,000 360,000 240,000 120,000 0
Owner’s equity
JM’s capital 380,285.814 562,009.314 1,017,737.814 1,478,866.314 1,940,804.814
Add: Net 181,723.5 455,728.5 461,128.5 461,938.5 462,708

Total owner’s 562,009.314 1,017,737.814 1,478,866.314 1,940,804.814 2,403,584.814

Total owner’s 1,042,009.314 1,377,737.814 1,718,866.314 2,060,876.814 2,403,584.814

equity and

Financial Analysis

A. Average Rate of Return = Average net income

Average net investment

= 404,645.4


= 0.38

B. Payback Period in Year = Future value

(1+r) n

Year 1 = 1,019,780.5 = 894,544.30

Year 2 = 1,355,945.76 = 1,043,363.16


Year 3 = 1,697,529.02 = 1,145,783.74


Year 4 = 2,039,913.28 = 1,207,792.42


Year 5 = 2,383,067.04 = 1,237,670.27


C. Break-even Volume Analysis = Total Cost

Selling price

Year 1 = 918,057 = 131.151kgs

Year 2 = 613,607 = 87,658.14kgs

Year 3 = 607,607 = 86,672.43kgs

Year 4 = 606,707 = 86,672.43

Year 5 = 605,852 = 86,550.29

The above shows the break even volume analysis, which depicts the

volume to be produced that can cover all cost but without gain and loss. The

result shows the output is greater than the break even volume through the year

which indicates that the business can already earn a profit.

Break-even Selling Price = Total Cost x Selling price


Year 1 = 918,057 x 7 = 5.74


Year 2 = 613,607 x 7 = 3.84


Year 3 = 613,607 x 7 = 3.84

Year 4 = 607,607 x 7 = 3.80


Year 5 = 605,852 x 7= 3.79


D. Return on Owners Investment

ROI = Net Income

Total Capital Investment
Year 1 = 181,723.5 = 0.19
Year 2 = 455,728.5 = 0.46


Year 3 = 461,128.5 = 0.47

Year 4 = 461,938.5 = 0.47
Year 5 = 462,708 = 0.47


A. Contribution to the Government

In the operation of the business, the government is expected to access the

business and compute the taxes. For this, 10% of the total net income will be

paid annually, environmental clearance from the DENR and DTI permit are


B. Contribution to the Household

The Cassava production can generate income not only on the part of the

business but also to those unemployed individual who certainly need job. They

can be hired as laborer in this project. The supplies of raw materials will also be

benefit since the demand for their good will increase.

C. Contribution to the Environment

Cassava production has a positive effect to the society because it is a

beneficial firm.



A. Form or Ownership

The project consists of two owners. Since there are two owners then the

business will be operated as partnership.

B. Organizational Chart




The manager will carefully manage all the activities in the project. He will

serve as the initiator responsible for the improvement of the project. He will be

in-charge in the production and in the marketing aspect.

The laborers do the activities in the production process. The contractual

worker will only be hired during the preparation of the site in planting and during

harvesting period. The caretaker, on the other hand, will serve as the regular

worker in the project. They will be the one who will take care of the products

and in charge for the production so that the buyer will be satisfied of the







Birthdate: November 28, 1992

Age: 19 years old

Address: Homelot, Pangasinan, Pantukan, ComVal Province

Educational Background

Elementary: Pantukan Elementary School

Secondary: Pantukan National High School

College: University of Southeastern Philippines

(DJAS Campus)

Age: 23 years old

Address: Homelot, Kingking, Pantukan, ConVal Province


Elementary: Lapu-lapu, San Isidro, Davao Oriental

Secondary: San Isidro National High School

College: University of Southeastern Philippines

(DJAS Campus)