MBA Canteen Ltd.

Products – (a) Samosa, (b) Tea

The initial production and sales of samosa shall be 20,000 and 40,000 units respectively expected to
grow at a constant rate of 10% p.a.

Variable Cost
Samosa 7.00 per unit { increase by 5% every year}
Tea 4.00 per unit{ increase by 8% every year}

Fixed Operating Cost

Salaries 80,000{ increase by 20% every year}

Selling Price
Samosa 15.00 per unit { increase by 5% every year}
Tea 8.00 per unit { increase by 5% every year}

Assets and Liabilities

Utensils 30,000
Structure 400,000
Apparatus 70,000
Cash 15,000
Security Deposit 10,000

Financing
Equity Capital 150,000
Term Loan 375,000
WC Loan 100,000 (in first year of operation)

Term loan shall be repaid in 5 equal annual installments.

Cash Sales (50%)
Credit Sales (50%)

Debtors – one month; Stock 3% of Total Variable Cost per annum.

Interest on Working Capital shall be 10% and on term loan shall be 8%.

Utensils worth Rs. 10,000 shall be acquired at the end of year 2. Rate of depreciation shall be 10% on
WDV.

Assets shall be sold at 50% of the book value at the end of year 5. Capital gains are taxed @10%.

Applicable tax rate is 10% on normal income.

Other incomes (photosta) shall be Rs. 60,000 growing @10% p.a.

Charity exp. shall be Rs. 30,000 growing @10% p.a.

Div. @ 15% p.a.