PROBLEM

 Source of funding. How can they reach out to people and help the foundation through donations or
where will they invest so that the inflow of cash will be stable to provide for the expenses of the
foundation?
 How can the foundation sustain its operations in the long run to achieve its vision of providing
sufficient support?
 The number of personnel isn’t enough to cater and assist 2, 000 children and 3, 000 parents

Activity 3

*Initial investment= 400, 000

Year Cash Inflow Cash to Date Payback Period

1 55, 000 55, 000 1 year
2 85, 000 140, 000 1 year
3 115, 000 255, 000 1 year
4 145, 000 400, 000 1 year
5 175, 000
4 years

Activity 4

Payback Period= Years before full recovery + Unrecovered amount

Cash flow during the period

Project 1
*Initial investment= 1, 000

Year Cash Inflow Cash to Date Payback Period

1 500 500 1 year
2 400 900 1 year
3 200 1,100
4 100 1, 200
5 100 1,300
2 years

*1, 000 – 900 = 100 (unrecovered cost)

Payback Period= 2 + (100/200)

= 2 + 0.5
= 2.5 years
Project 2
*Initial investment= 1, 000

Year Cash Inflow Cash to Date Payback Period

1 100 100 1 year
2 300 400 1 year
3 500 900 1 year
4 600 1,500
5 700 2,200
3 years

*1, 000 – 900 = 100 (unrecovered cost)

Payback Period= 3 + (100/600)

= 3 + 0.17
= 3.17 years

Activity 5

Return on Investment= Net Profit (Revenue - Cost)

Total Investment

Project 1
*Initial investment= 1, 000

Year Cash Inflow

1 500
2 400
3 200
4 100
5 100
Total 1,300

Return on investment= 1,300 – 1, 000

1, 000
=300/1, 000
= 30%

Project 2
*Initial investment= 1, 000

Year Cash Inflow

1 100
2 300
3 500
4 600
5 700
Total 2,200

Return on investment= 2,200 – 1, 000

1, 000
=1,200/1, 000
= 120%