Owners’: Mr:- kadir mussa

Location:- Haramaya town

April 2020
I
Haramaya
Table of content Pages

1. Executive Summary of project……………………………………………………………..…1

2. Introduction……….……………………………………………………………......................2
3.Historical Background………………………………………………………….............,.........4
4. The project area……………………………….........................................................,...............5
4.1.Location……………………………………………………………………,…..….,..5
4.2Topography…………………………………………………………………,…..…....5
4.3.Soiltype…………………………………………………………………....,..............6
4.4.Economic activities of the area…………………………………………....................6
5.The project…………………………………………………………………………….…........7
5.1.Justification of the project…………………………………………….…..….....7
5.2.Objective of the Project ………………………………………………….....…..8
5.3 Description of the Project ……………………………………........................9
6. Land utilization Plan…………………………………………………………………...........10
7. Market Assessment …………………………………..……….……………………....…...10
Table: - 1 Expected Income of The project……………………………………….......……11
8. Organization and Management ……………………………………………….......................12
9. Project Facilties.......................................................................................................................14
Table 2.1:- Man Power Requirement Plan of the Project….....………….…..............…..14
10. Fund of the project …………………………………………………………........................16
Table 4:- Projected Income Statement………………………………….…...........16
10.1 Investment cost …………………………………………………….………...….16
10.2 Running cost………………………………………………………….….............17
10.3. Project incom..........................................................................................................20
10.4. Incom statment.......................................................................................................21
10.5. Source of Fund………………………………………………………...................21
11. Environmental Impact Assessment.......................................................................................22
12. Conclusion …………………………………………………………………………......…..22

II
 1. Executive Summary

This is a feasibility study for project owner Mr. Kadir Modern multi-purpose market
center/Business center Building. The location of the project is very attractive and ideal for
running such modern business centers. The investment under consideration is also prepared with
the aim of establishing a modern business market center Building with modern multi-purpose
complex center services at Haramaya town.

As the area under consideration is not very far from the center of Harar City, it has well share
development social and economical infrastructure. Such as, electric power, water, telephone and
other infrastructures. The proposed project will be managed by the owners of the project who
have accumulated experience in Business multi-purpose building management. In addition to
this, hired employees will be handled the day to day activities of the project. It will also create
employment opportunities permanently for 42 citizens.

The total investment cost of the project is estimated at Birr 7,500,000.Which will be raised by
the owner's equity. From the total amount of money Birr 4,490,997 is for construction and
purchase of equipment's of the building. Birr is 2,677,286 for working capitals. In addition the
remaining project budget birr 331,717 expends for contingency.

Like most business venture the project aims to maximize return on invested capital. The
forecasted profit and/or loss statement computed for seven years indicated that the project would
generate an average net profit of Birr 1,743,854 in the first year and Birr 8,532,058.5 at the end
of seven(7) project years. Therefore, we can draw a conclusion that the project will be financially
viable. In view of the above consideration, the establishment of the project is highly
recommended.

Page 1 of 22
 2. Introduction

In Ethiopia, the current higher rate of urban growth, which is conditional by natural growth and
to urban migration, will result in continued rapid urban growth. Particularly, higher rate of growth
observed in large and medium urban centers which predominately the courtiers urbanization
pattern, implies doubling of their population in a decade. Urbanization will thus, place greater
challenge on both Regional and local governments of Ethiopia. Especially, the challenge for local
governments in which capacity to deliver socio-economic services and infrastructure which has
already been constrained will be much more serious.

At present Ethiopia stands predominantly an agrarian economy with urbanization level of only
17 percent which compares very low income and economy standards. Most urban centers play
predominant role as seats of political power and administration where as they exhibit in adequate
functional specialization in modern production and service activities. Due to this and mainly
because of the subsistence nature of farming, the level of urban-rural interaction and exchange is
quite weak. Urban areas primarily serve as collection center of agricultural product (produce),
which has to be channelled to large centers. The center therefore exhibits poor economic base
and increase proportion of their dwelling population is being affected by the incidence of poverty.

It is only recent that the government has given emphasis to urban area to launch a new initiative
and attractive policy environment that encourages private investments in urban area to contribute
the economic development and for the proper way of urbanization. Oromiya Regional State has
made constructive major to alleviate structural problem of urban areas through attracting
investments. This project is proposed in response to the needs for development of modern
business market to support the governmental policy by facilateting a compitative business market
and decreasing unemployment rate at town level.

East Hararghe zone in general is a cash crop area where khat and coffee production has become
an increasingly growing and leading economic activity. With expansion of cash crop in the zone

Page 2 of 22
and due to the currently low level of modern multi-purpose business center, the growing up of
urban population overtime increasing demand in modern business market centers. Haramaya
town is among the town in the Zone which known by low level of modern multi-purpose center
that did not match with the demand exist.

Moreover, the favourable situation for private sector in Haramaya town causes to raise
performance of investment and considerable number of projects are flourished as resent facts
revelled. Relatively presence of well-developed infrastructure and its nearness to Harar city
makes Haramaya town the highest recipient of investment.

Among different projects currently operational is in different status: from planning to starting
production; the modern business market center building sector development is hardly noticed, to
date. In spite of existence of high degree shortage of modern multi-purpose market center
building in Haramaya town. The investment is practiced neither by government nor by private
sector in the town. So that the presence of high demand gap for such modern business market
center, as well as the suitability and relative advantage of Haramaya town as multi-purpose center
and organizational interest of the project area attracts this investment.

Therefore, the project owners’ initiated the project and to be the pioneer for the modern market
center building in the town. And along this line, that the project owner Mrs. Kadir planned to
establish ‘’ Kadir Modern Business Market Center’’ building project in Haramaya town at
kebele 01 on main asphalt road.

Page 3 of 22
 3. Historical Background

Haramaya town is located in the most structurally cash crop producer areas in the zone where
most of the population is living in a good land and majority of the people are settled in mid and
high altitudes where rain fall is reliable both in terms of quantity and distribution pattern. Besides,
the livelihood of the rural mass surrounded woreda, is mainly depends on the merit of
Agriculture. Haramaya town with its growing history and It is claimed that the present area of
the town had permanent settlers and the name 'Haramaya' was applied only to the area. Haramaya
is an Afan Oromo term that literally comes from ‘haro-maya’. As to why this term was applied
to the town, group of informants argues that it was because of the name of the lake which found
in the area. After 1991, as part of the administrative reforms made by the restored government,
Haramaya was founded in this period. Haramaya town is found 12 km from Harar city to the
direction of west. It is the proximity to the most productive and fertile parts of the zone that
attracts the attention of many investors including the owners of the project. The existing
favourable condition with cash crop producer nature of the haramaya woreda especially
vegetables which highly generate income for the peoples, the gap to provide modern multi-
purpose market center is inductive potential of the selected project.

As in the other woredas of the Eastern Hararghe zone, the agricultural sector in Haramaya woreda
is characterized by traditional farming and small amount of livestock raring practice that are
entirely dependent on the merit of nature. The agricultural production which is believed to be a
major output of cash crops situation can be attributed to the development of urbanization. Major
problems manifested in the woreda are lack of appropriate market structure, lack of modern
business center and poor level of awareness among society on the mixed use business market.

Page 4 of 22
 4. The Project Area

4.1 Location
The modern multi-purpose business center, which basically serve as multi-purpose activities is

located in Haramaya town which located in Haramaya woreda. .In the Eastern Hararghe zone,

Haramaya worada is shares about 3% of the total area of the zone. Haramaya woreda is only

with woina-daga, Daga and kola climatic condition with estimated population of 271,018 people

in which majority of Haramaya woreda are rural inhabitant. Accordingly, the projection of the

2007 population of rural Haramaya woreda is estimated to be 220,988 people from the total and

about 50,029 people are semi urban dwellers. The mean annual temperature of the woreda is

about 22.5-degree celcies and mean annual rainfall is about 1000mm.

The location, which going to build this business center is facilitate with all infrastructure, like

telephone, electric, postal service, enough water etc.

4.2 Topography
The project site is located in Haramaya town which about 12km away from Harar city to the
direction of west. The town is situated at an altitude of about 2,000 meters above sea level and
majority of the woreda’s agro ecology falls in the woina Dega whether condition which is suitable
for life. In addition the general topography of the town is on a good flatted surface area.

Page 5 of 22
4.3 Soil type
The study of soil type in Haramaya town indicates as the soil type in the town is favourable and
good soil to construct building. So, our project is also chance full no more challenged by soil
type problems.

4.4 Economic Activities

The rural community of the woreda mainly depends on mixed farming system where crop
production is the major economic activity supplemented by animal husbandry. The urban
community of the woreda are mainly depend on small trading and different economic activities
while the woreda is well known by irrigated cash crop production especially khat, vegetables
mainly potato crop at rural and urban community focuses on the trade of such commodities. The
main problems of the woreda is lack of structurally attractive and competitive modern multi-
purpose market center. Citizen’s opportunity to employee and investment determine the
development of rural-urban relation and way of modernization of things. This may be realized
through development of competitive market center and good structure of trade and demand based.
To achieve this goal the present economic policy in Ethiopia is not doubtfully the appreciation
policy especially in the field of investment of urbanization and construction.

Our modern business market center in Haramaya town is close to the Haramaya TVET college
which enrol over 2000 students annually and there is access rural road to the Haramaya town that
can be enable the project to easily utilized by different sectors as well as traders.

Page 6 of 22
 5. The Project

5. 1 Justification of the Project

According to Ethiopia Economic policy, the government intends to revitalize the modern multi-
purpose market center building by privatization. The economic policy issued 1991, in its sub-
article 1-5 provide a provision for private sector participation in the area of urban development
including modern multi-purpose market center building. The policy allows the participation of
private capital, individual or collective in the construction of multi-purpose building with
encouragement of replacing old and slum houses as well as newly proposed multi-purpose land
use area in the town. Despite the fact that such encouragement and a shift of policy are made,
there is still a high demand for modern multi-purpose market center building.

One of the obvious consequences of urban development is increase demand for urban service.
Miss much between supply and demand of modern market center building is much problems.
Multi purpose business center building problem is seriously felt in any urban centers of the
country both quantitatively and qualitatively. As it is common to Ethiopia towns, Haramaya town
suffer from such problems as there is a large gap between the demands on the one hand and the
lack of supply and stock to services on the other hand.

The land, which is planned for this project, was suitable for multi-purpose purpose. It is owned

by the project owner having an area of 210 m2. And also, the newly revised master plan of the
city changes the land use to mixed use and business purpose and hence this is the prime motive
of this project to act in line with the master plan. And so to act on business project to wards
constructing business market center building project and provision of related service that
guarantee minimum living environment. Implementing the project contributes multi-purpose
building in that it provides business services, which are interactive, each other.

The project aims to construct modern business market center building, which will be, use full for
eight different business ventures. This is to create business corner with in the proxy of the resident
of the community. Lack of butics, cafeteria and internet services, both sexs beauty salon, bed

Page 7 of 22
room and supper market in the area and the changing culture of the community to have modern
business market center in nearby is the deriving force to think for the establishment of modern
business market center buildings. So, the envisaged project is a stereotype of the above-
mentioned approach.

On the basis of the above rational: existence of high-level demand and the current land use
approach motivates the planned project in addition the personal need to changed fattening such
business market center.

5.2 Objectives of the Projects

It is obvious that profit is the universally prime objective for any private business the same is true
for this project. But in addition to profit, the project does have the following objectives.

 Create job opportunities for a number of employees during construction and its full
operation

 Generate reasonable returnee on planned investment

 To minimize acute shortage of modern business market center buildings in the town

 To create additional source of revenue for the municipality of the town, and

 To Contribute to the over whole socio-economic development of the region and the
country as well.

Page 8 of 22
 5.3 Description of the Project

The project will be planned on the existing 210 m² of land, which is miss used to date. The

project in its 1st phase starts by constructing a standard G+3. In addition, the project also
planned to have multi-purpose centers that will took about 69.05% of land from the total
area. The project has the component of: modern multi-purpose market center building with
store house, butics shopping, cafeteria and Internet services, electronics shopping, supper
market, Beauty shop and bed room and other rooms which may serve for offices and others.
All components of the project will be run by the owner himself and/or leas out for other
business firms on rental basis.

The land is found in kebele 01, which is just adjacent to main asphalt. The place is accessible
and furnished with major infrastructural facilities. Asphalt road, water line, electric light and
telephone lines are already supplied utilities that add value for the land. Planning modern
multi-purpose market center building project on a plenty of land would bring down the cost
of access roads, power telephone line and water lines and other infrastructure. This out
weights the project to establish modern business market center firm.

The project owner’s are going to build standard high-class G+3 on a mass scale, so his prices
plummeted further. As already mentioned, the project will have rooms which will be serve
as a store, cafeteria, supper market, bed room and other rooms which may serve for offices
and for other purposes. And also rental offerings will be provide on attractive proposition to
those looking for the purposes mentioned above. The business corners also serve both the
local community and other needy segment of the community.

In addition to 1st phase project of G+3 house, because the land is possessed by the owners’
which is availed by the Haramaya town urban land development and administration office
the project wants to expand and concentrate itself in recreational and resort sector in the
future. As to the vision of the project owner’s there want to expand the current business as
well as he shall be participating in others development. And also, in long run the project will
expand its product to include higher value home that caters to the growing upper class.

Page 9 of 22
 6. Land Utilization Plan

Out of 210 m2 of land 145 m2of about (69.05%) of the land will be allocated for the main modern
multi-purpose market center building of G+3. The rest 30.95% of the land will be used for other
different purposes. In general, the planned project will respect the town rules and master plan
instruction and acts accordingly. And the over all land use pattern is described as follows:

Almost all of the business components will have more than 33 rooms and depending on the
architectural and structural design there is leeway for modification.

7. Market Assessment

Generally Modern multi purpose market center Building sector has been in a good turn over for
the last more than three decades in most of Ethiopia cities. But having high level capital turn over
and low risky business limited multi purpose building developers has been struggling since
EPRDF controlled the country in 1983 E.C. This very few Multi Purpose market center Building
oriented companies limit themselves in Finfinne while the problem is common to most of the
cities with varying magnitude. In the case of Haramaya town there is high demand for multi
purpose business market center building. Because of this huge demand gap both rent price of
renting such buildings is very attractive for the owners’.

Still, the construction and the selling and renting price of buildings is by far below from other
town’s identical level Multi Purpose Buildings. Being a multi purpose building is a stationery
asset producing in excess some where doesn't contribute for the demand gap of elsewhere due to
immobility nature it has. But these does not hold necessarily true in case of other cities and
Haramaya town context. So, factors show the existing marketing advantage of modern multi-
purpose market center in Haramaya.

The business market center building demand in Haramaya shows at increasing rate, some
individuals renting substandard shops and business centers with high price due to supply gap.
The increment in demand for modern business center forever-expanding recreational area and
absence of supermarkets and restaurants and the like utility service are common in Haramaya.

Page 10 of 22
The renting price for such type of building will have better price as compared to the resident
houses.

Table: - 1 Expected Income of The project

SN Component Monthly rent in Birr per room Annual Income In Birr

1 19 shopping rooms 3,300*21=69,000 828,000

2 Beauty salon (Both sex) 2800*1=2,800 33,600

3 supermarket 800 19,600

4 Internet Cafeteria 6,000 72,000

5 Confrance Hall Services 3,600 432,000

6 Computer training rooms 2,750*8=16,500 198,000

7 Store house 5000 60,000

Total 85,500 1,573,200

Page 11 of 22
 8. Organization and Manpower

To make the project effective and efficient having competent management practice and prompt
decision making is essential. The planning, coordinating, directing and supervision of the project
will be the responsibility of the promoter who is an educated and experienced person in different
field of business. Further workers that are more technical like schematic designing of buildings,
preparation of building quantity and construction supervision activities will be delegated by
building engineer employed on contractual basis of one year. Relevant staff and workers will be
employed to assist the owners and the engineer. On permanent and casual terms. Apart from this
different caliber building construction technicians like masonry, carpenter, plumber and
electricians will be employed as the project demands.

The construction of the project is fully given to legal contractor through legal bid and supervised
by the resident engineer who will be recruited by the investor. The implementation of the project
is fully managed by the investors himself or their legal representative.

When its construction is fully completed and the center commence its service delivery, it will
have one project administrator who will follow up the day to day activities of the project. The
general manager will also prepare weekly/biweekly/monthly report on the performance progress
of the center and submits to the investors as required and demanded by them. The general
manager will be responsible to monitor and control the overall financial flow and responsible for
monitoring and controlling of the service delivery and security of the center properties.

The proposed project, therefore, will no face any management and organizational risks. Besides
its creation of vast employment opportunity during its construction phase for both daily laborers
and professionals, the project will create permanent employment opportunity for about 42
citizens, with the annual salary of 378,600 Birr.

Page 12 of 22
Table 2:- Man Power Requirement Plan of the Project

SN Description Unit Qualification Quantity Monthly Annual

salary
Salary/head
Expense

1. General Manager No B.A. in 1 4,000*1=4000 48,000

management

2. Marketing officer " Dip. in 2 800*2=1600 19,200

Purchasing

3. Internet service center " Dip. in ICT 2 800*2=1600 19,200

workers

4. Cashiers " Dip. in 4 800*4=3200 38,400

Accounting

5. Cleaners " 8 350*8=2800 33,600

6. Seales man " Grade 10+2 in 14 800*14=11,200 134,400

Accounting

6. Guards " Grade 10 5 550*5=2750 33,000

7. Shop keeper " Grade 10 4 550*4=2200 26,400

8. Store man " Grade 10 2 550*2=1100 26,400

Total 42 30,450 378,600

Page 13 of 22
 9. Project Facilities

The Kadir Modern Commercial Market Center has intended to have a total of 33 different
rooms. The project also intended to have required essential furniture for the project, which will
be promoted by locally, purchased for local production units.

Table 2.1:- Shopping rooms, bedrooms and other parts of the Commercial center

S/N Type of rooms Unit Quantity Remarks

1. Managers office No 1 Basement floor

2. Administrator office " 1 "

3. Secretary's office 1 "

4. Supermarket " 6 ground Floor

5. Male and Female Butics/shopping rooms " 2 1st Floor

6. Shoes, Electronics,and cosmetics shopping rooms " 9 ground Floor

7. Restaurant & Cafeteria, bed room, and Internet caffee “ 10 2nd& 3rd

Floor

8. Store house 1 ground Floor

8. Others " 2 Basement floor

Total 33

Page 14 of 22
Table 3: Lists of equipment and tools required for Kadir Modern multi-purpose Market
Center

S/N Items Unit Total cost(Birr)

1. Bed room materials LS 140,500

2. Cafeteria /restaurant’s equipment & Furniture LS 95,900

3. Water reservoir(ROTO) 01 12,800

4. Refrigerator & other machines 02 70,000

5. Office furniture& shopping center shelf's LS 97,700

6. Different record books LS 6,000

7, Others LS 60,546

Total 483,446

LS=Lump sum
The required equipment and tools are shown in the table. Accordingly the total costs of equipment
and tools is estimated at Birr. 483,446.00

Page 15 of 22
 10. Fund of the Project

10.1 Investment Cost

The major investment costs of the project is construction cost of the whole business building and
its compound. The total investment capital of the project will amount 7,500,000 Birr and the
total of the capital component ends up by producing fixed capital: standard G+3 business
building. However about 15% of the cost is over head cost of the project. All of the total fund is
required in local currency.

Table 4: Total Investment cost

No Cost item Total cost

A. Fixed Investment Cost

1.1. Construction and civil works of the 4,995,840

building

1.2. Annual lease payment of the building 11,000

1.3. Equipments and materials 483,446

Subtotal 5,490,286

B. Initial Working Capital 1,677,286

C. Contingency at 4% 332,428

TOTAL A+B+C 7,500,000

Owner Equity (100%) 7,500,000

Page 16 of 22
 10.2 Operating Costs

Operating costs include all project expenses other than fixed investment. They are expenditures
to be spent on annual operating items. As it will be seen latter in this document, annual operating
costs in the first year of the project life are estimated to be Birr 2,677,965.4. Because of increase
in capacity utilization; annual operating costs are expected to rise to Birr 3,025,347.4 at the end
of 7th year. In estimating operating costs, it has been tried to depend on current market
information and on the experiences of similar projects.

Page 17 of 22
 Table 5: Annual Operating Cost

No. Cost Type Project Years

1 2 3 4& 5 6 7
thereafter

1. Costs of commodities 1,654,200 1,819,620 2,001,582 2,001,582 2,001,582 2,001,582 2,001,582

2. Repair and maintenance

27,649.80 30,414.80 33,456.20 36,801.90 36,801.90 36,801.90 36,801.90

3.
Property Insurance 13,824.90 15,207.40 16,728.10 18,400.90 18,400.90 18,400.90 18,400.90

4. Utility expenses
12,000.00 13,200.00 14,520.00 15,972.00 15,972.00 15,972.00 15,972.00

5. Depreciation
110,599.10 110,599.10 110,599.10 110,599.10 110,599.10 110,599.10 110,599.10

6. Administrative cost (house

management expenses) 10,200.00 11,220.00 12,342.00 13,576.20 13,576.20 13,576.20 13,576.20

7. Uniforms
4,000.00 4,400.00 4,840.00 5,324.00 5,324.00 5,324.00 5,324.00

Page 18 of 22
8. Costs of food
104,668.80 111,135.70 116,249.20 120,274.20 120,274.20 120,274.20 120,274.20

9. Costs of sleeping bed

95,000 97,680 99,900 104,600 104,600 104,600 104,600

10 cost of restaurant services

24,812.80 27,294.00 30,023.40 33,025.80 33,025.80 33,025.80 33,025.80

11 Cost of computer training

center 83,880.00 87,268.00 92,494.80 94,744.30 94,744.30 94,744.30 94,744.30

12 cost of conference service 52,000.00 57,200.00 62,920.00 69,212.00 69,212.00 69,212.00 69,212.00

13. Wages and Salary

378,600 378,600 378,600 378,600 378,600 378,600 378,600

14. Costs of supermarket

101,500 105,700 109,000 112,450 112,450 112,450 112,450

15. Others miscellaneous

5,000.00 5,500.00 6,050.00 6,655.00 6,655.00 6,655.00 6,655.00

Total
2,677,936.4 2,843385.4 3,025,347.4 3,025,347.4 3,025,347.4 3,025,347.4 3,025,347.4

Page 19 of 22
 10.3 Project Income
The project earns its revenue by renting the shopping rooms and selling goods that proposed as output. To be competitive in the market, the
selling price of the Project's output is determined in such a way that it does not impose higher price on ultimate costumers. Accordingly, the
project expects total revenue of Birr 16,419,473.8 at the end of 7th year.

Table6 : The Revenue projection for seven consecutive project years

No Revenue type Project Years

1 2 3 4& thereafter 5 6 7

1. Selling of
2,812,139 4,248,959.00 6,658,618.10 10,965,264.60 10,965,264.60 10,965,264.60
commodities 10,965,264.60

2. Rent of shopping &

969,650 1,066,615 1,173,275.5 1,290,603.2 1,290,603.2 1,290,603.2 1,290,603.2
other rooms

3. Restaurant & Internet

676,000 878,800 1,318,200 2,007,300 2,007,300 2,007,300 2,007,300
coffee services

4. Conference Hall
432,000 453,600 476,280 500,094 500,094 500,094 500,094
Services

5. Supermarket 525,780 736,092 1,104,138 1,656,207 1,656,207 1,656,207 1,656,207

Total 5,415,570 7,384,068 10,730,514.6 16,419,473.8 16,419,473.8 16,419,473.8 16,419,473.8

Page 20 of 22
 10.4 Income Statement

Here, project revenue and production cost (operating costs, depreciation and Bank interest) are
listed and compared to see whether the project generates profit or lose. According to the
forecasted income statement table, the project is found profitable throughout its life. The amount
of the net profit to be generated by the project varies from Birr 1,743,854 at the end of the first
year to Birr 8,532,058.5 at the end of the seventh year.

Table: Forecasted Income Statement

Project Years
Description
1 2 3 4 5 6 7

Gross Revenue 5,415,570 7,384,068 10,730,514.6 16,419,473.8 16,419,473.8 16,419,473.8 16,419,473.8

Less: Operating
2,677,965.4 2,843385.4 3,025,347.4 3,025,347.4 3,025,347.4 3,025,347.4 3,025,347.4
costs

Income from
2,737,604.6 4,540,682.6 7,705,167.2 13,394,126.4 13,394,126.4 13,394,126.4 13,394,126.4
Operation

Profit before tax 2,491,220.2 4,132,021.2 7,011,702.2 12,188,655 12,188,655 12,188,655 12,188,655

Less: Profit tax 747,366.1 1,239,606.4 2,103,510.7 3,656,596.5 3,656,596.5 3,656,596.5 3,656,596.5

NET PROFIT 1,743,854 2,892,414.8 4,908,191.5 8,532,058.5 8,532,058.5 8,532,058.5 8,532,058.5

N.B Profit tax is considered as 30% of the profit.

10.5 Source of Fund

Out of the above mentioned 7,500,000Birr financial capital requirement of the project the owners
of the project owes 100% of the fund by his equity.

Page 21 of 22
 11. Environmental Impact Assessment

The construction this modern supermarket center building in the town and the activities all in all
is friendly related with environment. Since such business centers has no potential to produce the
waste products that polluted the environment. Finally, the construction of such business center
contributes good opportunities for the modernization of the town as well as for Nation.

12. Conclusion
The the project under consideration is also prepared with the aim of establishing a modern multi-
purpose market center in Eastern Haraghe zone, at Haramaya town.

The area is possessed the social and economic infrastructure. The proposed project will be
managed by the organizational owners or by recruited individuals who have accumulated
experience in project management. It will also create employment opportunities for 42
permanently and 20 citizens temporarily.

The total investment cost of the project is estimated at Birr 7,500,000. Out of which 100%
accounts will be raised by the owner's equity. From the total amount of money Birr 5,490,287 is
for construction and purchase of equipment of the building while birr 1,677,286 is used as
operating cost and 331,717 birr is used as contingency.

Moreover, the forecasted profit indicates that the project would generate an average net profit of
Birr 8,532,058.5 for the seven (7) consecutive project years. Therefore, we can draw a conclusion
that the project will be financially viable. In view of the above consideration, the establishment
of the project is highly recommended.

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