Table of Contents

NVPFIA PALAY PROCESSING AND 2

MARKETING BUSINESS CONCEPT
EXECUTIVE SUMMARY 4
RATIONALE 5
BRIEF DESCRIPTION OF PROJECT AND 7
SERVICES
CRITICAL FACTORS 10
GEOGRAPHIC LOCATION 11
POTENTIAL TARGET 12
CUSTOMERS/MARKETS
PROJECT COST SUMMARY 12
a. Project Cost 12
b. Space Requirement 13
c. Machinery and Equipment Requirement 13
d. Office Equipment, Furniture and Fixtures
Requirement 15
e. Transportation/Vehicle Requirement 15
f. Human Resource Requirement 15
g. Procurement Plan 16
h. Assumptions 16
i. Projected Income Statement and 18
Projected Cash Flow
j. Financial Analysis 20

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 NUEVA VIZCAYA PROVINCIAL FEDERATION OF IRRIGATORS
ASSOCIATION (NVPFIA) PALAY PROCESSING AND MARKETING
BUSINESS CONCEPT

Segment Palay Processing and Marketing

1. Proponent Group Nueva Vizcaya Provincial Federation of Irrigators
Association (NVPFIA)
2. Product/Service The proposed project will be a trading of rice from
processed palay that are going to be purchased from
the different irrigator’s association within the province
3. Users/Clients Members and other local farmers within the province

4. Constraints Constraints:
/Risks/Opportuniti - High costs of rice within the market;
es - Low cost of palay from buyers/traders;
- Presence of middlemen along the palay value
chain
Risks:
- Other low-cost milling services within the area;
- Import of commercial rice from neighboring
countries
Opportunities:
- Establish a trading enterprise that will serve as
consolidator for the locally produced palay within
the province;
- The proposed project will create employment
within the target area;
5. Manpower No. Description No. of Personnel
Requirements
1 Supervisor/Quality Control 1
and Structure
2 Accounting Personnel 1
3 Inventory in Charge 1
4 Warehouse/Inventory Clerk 2
5 Sales Staff 1
6 Purchasing Staff 1
7 Maintenance Personnel 1
8 Unskilled Workers 8
9 Helper 3
11 Driver 3
12 Security 3
6. Partner(s) - National Irrigation Administration
- Provincial Government of Nueva Vizcaya
7. Contact Person - Bruno B. Gamponia
President

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8. Contact Number 09272738388
9. Location Malasin, Dupax del Norte, Nueva Vizcaya
10. Investment Cost Counterpart TOTAL
and Sharing No
Particulars PROPONEN PROJECT
. EPAHP-NIA
T GROUP COST

Capital Cost
A Land
5,000,000.00 5,000,000.00
Building and
B
Infrastructure 7,150,000.00 7,150,000.00
Machinery and
C
Equipment 6,920,000.00 6,920,000.00
Office
D Equipment,Furnitur
745,500.00 745,500.00
es and Fixtures
Transportation
E
Vehicles 8,000,000.00 8,000,000.00
Pre-Operating
F
Expenses 300,000.00 300,000.00

SUB-TOTAL
23,115,500.00 5,000,000.00 28,115,500.00
Working Capital
-
Initial Working
G
Capital 10,000,000.00 10,000,000.00
I Salaries & Wages 2,064,000.00
2,064,000.00
SUB-TOTAL
12,064,000.00 - 12,064,000.00

TOTAL PROJECT COST 35,179,500.00 5,000,000.00 40,179,500.00

11. Revenue and Its

Collection Sales Revenue 14,999,880.00 18,779,280.00 24,469,330.00
Less: Cost of Goods
Sold 10,113,600.00 12,662,124.00 16,386,268.00
Gross Profit 4,886,280.00 6,117,156.00 8,083,062.00
Less:Administrative
Expenses 2,263,998.80 2,301,792.80 2,358,693.30
Operating Expenses 1,460,631.53 1,517,322.53 1,602,673.28
Net Income 1,161,649.67 2,298,040.67 4,121,695.42
12. Financial Payback Peiod – 2 years and 6 months
Indicators ROI – Year 1(3%), Year 2 (6%), Year 3 10%
IRR – 11%
NPV – PhP 705,268.62

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 EXECUTIVE SUMMARY
The proposed unit has an installed capacity of 1 ton per hour of rice husking and 1
ton per hour with rice polishing annually on 16 hours per day operational basis. The
unit will operate at 65% of the installed capacity during first year of operation. This
production capacity is estimated to be economically viable & justifies the capital as
well as operational cost of the project.

The estimated total cost of the proposed is PhP40,179,500. The project will provide
direct employment opportunities to 25 people including management; additionally,
seasonal worker will also be engaged.

Based on financial projections, the business will generate an estimated net income
of PhP1,161,649.67 in its first year of operations with an ending cash flow of
PhP12,514,883.00. Further, results of financial analysis show that: (a) Return on
Investment is 3%, 6% and 10% for the 3 years of operations. A gradual increase that
shows a promising business venture. (b) Its Internal rate of Return, using 10%
discounted rate, is equivalent to 11%. (c) According to the Payback Period Analysis,
the total investment of the project can be return in a span of 2 year and 6 months.
(d) Based on the Breakeven Analysis, as shown below:

Break-Even Point BEP, Sales BEP, in units

Polished Silky Rice 3,935,523.64 78,710.47
Polished Non-Silky Rice 3,384,550.33 78,710.47
The table shows that the breakeven analysis is higher than the estimated net income.

Based on the foregoing, the proposed Nueva Vizcaya Commercial Rice Hub is
feasible.

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 RATIONALE
In the country’s second geographical region (from south to north) lies vast
agricultural lands, Nueva Vizcaya, otherwise known as “gateway” to the valley, has
other flagship crops, like oranges, pineapples, salad vegetables, cut-flowers,
mangoes, livestock and fish farming, rice farming stands out as a common
denominator.

The National Irrigation Administration (NIA) confirmed that some 139,000 hectares
of the region’s total land area are planted with rice. Further, the construction of the
Magat Multipurpose Dam has provided a steady irrigation for rice farms in Isabela,
while Cagayan river irrigates the northernmost province in Luzon.

Though with not so sizable reservoirs, Nueva Vizcaya is strategically located

upstream of the Magat River. Its extensive watershed provides fresh irrigation water
from tributaries, like Matuno, Imugan, Santa Cruz and Sante Fe rivers. This is
backed by a number of creek networks enough to sustain a year-round or three
cropping seasons (i.e. rice-planting calendar). The Vizcaya watershed literally
supplies Magat Hydroelectric Dam reservoir in Ramon, Isabela.

The wide-scale devastation brought about by the eruption of Mount Pinatubo in 1991
damaged thousands of fertile farms in Central Luzon. It also caused the drying up of
the Pantabangan Dam reservoir in Nueva Ecija, a major source of irrigation water in
the central plains, thus, stripping the former rice granary of the Philippines of its lofty
status.

It is precisely for this reason that the water flowing from the Casecnan river from the
southern part of Nueva Vizcaya has been tapped to boost both power and irrigation
requirements of Central Luzon through a 26-kilometer underground diversion weir
that would siphon Vizcaya water to the Pantabangan Hydroelectric Dam in Nueva
Ecija.

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Today, Cagayan Valley has emerged as the country’s grains granary.

In the Province of Nueva Vizcaya, the table below summarizes the Annual Palay
Sufficiency for 2015-2017, to wit:

Rice Sufficiency 2015 2016 2017

Population 452,287 458,571 464,943
Palay Production
269,120 283,888 272,888
(MT)
Rice Production 174,928 184,527 177,377
Consumption 51,110 50,383 51,083
Rice Sufficiency
342.26% 366.25% 347.23%
Level
Rice Surplus 123,818 134,144 126,294
As displayed in the table above, the computed rice sufficiency level from 2015 to
2017 went beyond 100% which means that the rice production in the province is
more than sufficient for the consumption of the populace on each of the year stated.
However, due to the introduction of Rice Tariffication Law, the farmers in the
province is at the losing end of the economy. This may be due to the unethical trade
practices of middlemen or players within the value chain.

Thus, this proposal. It aims to encourage the establishment of support facilities such
as Commercial Rice Hub as this will enable farmers to deliver their produce to the
market on time, and thus, avoid spoilage and unnecessary losses.

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 BRIEF DESCRIPTION OF PROJECT AND SERVICES
The proposed unit would be providing husking and polishing services to rice
producers. Additionally, the unit would also be purchasing local rice paddy for de-
husking and polishing the rice to sell it into the market. The husking unit would
operate 7 months in a year and polishing unit works all year round.

A. Production Process
a. Rice Husking
Husking is the process of separating the rice from the husk. Rubber roll
and hullers are used to shatter the paddy to produce rice. The husking of
paddy produces different products, which include 55% Head Rice, 9%
Broken Rice, 3.5% Powder Rice, 31.5% Husk and 1% Waste and Dust
Particles. Different processes are used for separation of head rice, broken
rice, rice powder, dust and bran. The husking unit operates seven months
in a year.
b. Rice Polishing
Polishing is the process of cleaning and polishing of brown rice
(head/broken rice) to produce different value-added rice products such as
silky and non-silky rice. In this process various types of cleaners /
polishers are used to give shine and silkiness to rice.

In the current industrial practice, both the husking and polishing units are
not operated at the same time due to certain reasons. After the husking
operation, the brown rice requires a time of six to ten weeks for drying and
conditioning. So, the brown rice is stored for a period of at least two
months before taking it to the polishing process.

The proposed unit would polish (process) in-house rice obtained from the
husking process and the remaining capacity would be used to provide rice-
polishing services to other rice suppliers. The processed rice (both brown
rice and polished rice) would be stored during the first few months of

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 harvesting season, as the prices are generally lower due to oversupply of
rice in the market.

B. Product Mix
The proposed project would mainly provide husking and polishing services to
rice producers who do not own a husking and polishing unit. It is assumed
that 10% of the husking machinery capacity would be utilized in providing
husking services, while the remaining 90% of the capacity would be used to
process the paddy rice purchased / bought by the federation.

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 Product Mix (Husking) Percentage
Services to External Rice 10%
Producers
De-husking of Own Purchased 90%
Paddy
Similarly, portion of polishing service capacity will be used to cater for the
polishing requirements of other companies, whereas, 90% capacity of the
polishing machine would be utilized to process the rice obtained from husking
of the purchased rice paddy.
Product Mix (Polishing) Percentage
Services to External Rice 10%
Producers
De-husking of Own Purchased 90%
Paddy

The products produced from the husking unit include: Head Rice, Broken
Rice, Powder and Husk. The head rice would be processed further by the
polishing unit and the broken rice, powder and husk are sold into the market.
The percentage of each product is given in the table below.
Product Mix Percentage
Rice for Polishing 60%
Broken Rice 8%
Powder 3%
Husk 28%
Waste 1%
The head rice obtained through the husking process is further processed in
the polishing unit. The products produced from the polishing unit and their
percentages are given in the table below:
Product Mix Percentage
Polished Silky Rice 40%
Polished Non-Silky Rice 40%
Polished Broken Rice 10%
Bran 10%

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 CRITICAL FACTORS
The following are critical factors to be considered for the project to be successful, to
wit:
• Complete adherence to best agronomic practices is critical to the success of
this project; therefore, technical knowledge & experience of the entrepreneur
in the field of food processing technology / business is absolutely necessary;
• Selection of quality paddy rice on the basis of best analysis of cost and
revenues for a given season; cost efficiency through better management;
• Appropriate logistics and transportation of paddy rice to the processing unit;
• Brand positioning and enhancement of production of rice may widen national
and international market for the product;
• Organic rice produced with the use of bio-fertilizer, bio insecticides and
pesticides has a good domestic and international market;
• Efficient recovery of by-products and their utilization may improve operational
performance;
• Properly trained seed staff should be engaged and comprehensive staff
training programs to be adopted for capacity building;
• Careful selection of good location and purchase of land at competitive price;
and,
• Effective marketing and distribution of the product particularly to the retailers.

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 GEOGRAPHIC LOCATION
According to the Nueva Vizcaya Provincial Socio-Economic and Physical Profile
(PSEPP) 2017, the provincial palay production increased from 0.21 MT (2011) to
0.26 MT (2017) with an annual average growth rate equivalent to 3.89%.
Furthermore, the production area also expanded from 55,999 Ha (2011) to 62,324
(2017) or an equivalent growth rate of 1.89%. The mentioned variable increase
resulted to an increased production from 3.9MT (2011) to 4.39MT (2017).

The table below presents the production volume and area per municipality in the
province:

Based on the available statistics, rice production is available in all municipalities of

the province. Keeping in mind the varying production areas for rice cultivation in the
province, it is highly recommended that the project should be located within the
vicinity of Brgy. Malasin, Dupax del Norte, Nueva Vizcaya.

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 POTENTIAL TARGET CUSTOMERS/MARKETS
The potential target market for the produced rice will be the general public in region
2 as well as nearby provinces including Manila. It will specifically target the following:
• Hotels, Fast Foods and Restaurants;
• Traders, Suppliers and Exporters of Rice;
• Local Retailers;
• Departmental/Supermarket Retail Stores;
• LGUs/NGAs;
• Farmers;
• Sari-Sari Stores
• Cooperatives;
• Farmer-Members; and,
• Households
PROJECT COST SUMMARY
A detailed financial model has been developed to analyze the commercial viability
of the NVPFIA Commercial Rice Hub. Various costs and revenue related
assumptions along with results of the analysis are outlined in this section. The
Projected Income Statement are also attached as annexes.
a. Project Cost
The table below presents the Total Project Cost which amounts to
PhP40,683,500, with details as follows:
Counterpart
TOTAL PROJECT
No. Particulars PROPONENT
EPAHP-NIA COST
GROUP
Capital Cost
A Land 5,000,000.00 5,000,000.00
Building and
B 7,150,000.00 7,150,000.00
Infrastructure
Machinery and
C 6,920,000.00 6,920,000.00
Equipment
Office Equipment,
D Furnitures and 745,500.00 745,500.00
Fixtures
Transportation
E 8,000,000.00 8,000,000.00
Vehicles

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 Pre-Operating
F 300,000.00 300,000.00
Expenses
SUB-TOTAL 23,115,500.00 5,000,000.00 28,115,500.00
Working Capital
G Initial Working Capital 10,000,000.00 10,000,000.00
I Salaries & Wages 2,568,000.00 2,568,000.00
SUB-TOTAL 12,568,000.00 - 12,568,000.00
TOTAL PROJECT COST 35,683,500.00 5,000,000.00 40,683,500.00

b. Space Requirement
The most critical factor for setting up a rice unit is the accessibility to raw
materials. As mentioned earlier, it is recommended that the location of the
proposed project will be at Brgy. Malasin, Dupax del Norte, Nueva Vizcaya.
The total land requirement for the proposed project is 2 hectares or 20,000
square meters. Mr. Alexander Tominez, the federation’s treasurer, is willing
to provide the said land for free in the initial periods and with lease agreement
on the succeeding period (i.e. 5 year of operation). This would be beneficial
for the project as the investment required for infrastructure and other costs is
high and it is not advisable to invest a huge amount on the procurement of
land. Total estimated land cost is taken at PhP5,000,000.00 per hectare.

Specific details of space requirement and cost related to building and

infrastructure is given below:
Estimated Estimated Estimated
Building & Infrastructure Required Area (in Cost per Total Cost (in
square meters) Square Meter PhP)
1 Land 20,000 5,000,000.00
2 Rice Mill and Office Building 200 12,000.00 2,400,000.00
3 Warehouse (for Palay Storage) 400 8,000.00 3,200,000.00
4 Multi-Purpose Solar Drier-Pavement 1,000 1,000.00 1,000,000.00
5 Boundary Wall 500,000.00
6 Gate 50,000.00
TOTAL BUILDING & INFRASTRUCTURE 9,150,000.00

c. Machinery and Equipment Requirement

Most of the machinery and equipment required for the husking and polishing
unit are available locally, however, the quality and efficiency should be

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considered. The total estimated cost for the procurement of machinery and
equipment amounts to PhP6,920,000.00

The list of necessary machineries and equipment are provided below:

Estimated Estimated Total

Machinery and Equipment Quantity
Cost per Unit Costs (in PhP)
Multi-Pass Rice Mill 3,920,000.00
1 Lot pre-cleaning system comprising of concrete
loading bin with excavated pit where the paddy
1 pre-cleaner was installed. It is an oscillating type, 1 301,515.50 301,515.50
complete with dust suction and cyclone dust
collector, driven by 2.0 hp electric motor
1 unit rubber roll huller - with 6"x10" rubber roll,
complete with hopper and winnover mounted on a
2 1 383,890.00 383,890.00
common steel base, driven by 10.0 hp electric
motor
1 unit paddy separator - 3 layer tray paddy
3 separator, complete with winnover and control 1 413,270.00 413,270.00
tank driven by 2.0 hp electric motor
1 unit de-stoner - mounted on steel base structure
4 1 260,169.00 260,169.00
driven by 1.0 hp electric motor
2 unit polisher - vertical arrangement, mounted on
5 a steel base structure, each unit driven by 20 hp 2 277,485.00 554,970.00
electric motor
1 unit brewer (binlid) sifter - brewer sifter,
oscillating type, complete with eccentric drive and
6 1 162,760.00 162,760.00
mounted on steel base, driven by 1.0 hp electric
motor
Complete set bucket elevator system - steel
bucket elevator, complete with reducers, buckets
and pulleys, with appropriate 1.0 hp electric motor
7 1 690,716.00 690,716.00
shared each with the paddy pre-cleaner, rubber
roll huller, gravity paddy separator, de-stoner and
rice box.
1 UNIT steel rice box – holding capacity of
8 200 kgs. Rice, complete with stand and 1 202,605.00 202,605.00
discharge port with control
1 LOT assorted Ancillary parts – comprising
of elevator spouts, V and flat belts drive,
9 1 358,709.00 358,709.00
catwalk steel structure, exhaust duct and
control panel board
1 LOT electrical materials – for electric motors
10 connections comprising of wire conduits and 1 185,811.60 185,811.60
fittings
11 1 UNIT electrical control panel 1 222,105.00 222,105.00
1 UNIT rice hull bin – minimum total volume
of 60 cu. Meter Dimension: (LxWxH)
12 5mx3mx4m Materials: G.I. sheet (1.2 mm 1 163,478.90 163,478.90
thick) With angle bar frame 2”x4/25” (51 mm x
4mm) With steel column

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 Complete set of basic tools and accessories
13 1 20,000.00 20,000.00
that can be used for regular maintenance
Mechanical Dryer 1 2,000,000.00 2,000,000.00
Generator Set 2 500,000.00 1,000,000.00
TOTAL MACHINERIES & EQUIPMENT 6,920,000.00

d. Office Equipment, Furniture and Fixtures Requirement

The following are recommended furniture and fixtures for the project:
Estimated
Estimated Total
Office Equipment, Furnitures & Fixtures Quantity Cost per
Costs (in PhP)
Unit
1 Office Tables 6 10,000.00 60,000.00
2 Chairs for Staff 6 3,000.00 18,000.00
3 Chairs for Visitors 50 600.00 30,000.00
4 Conference Tables 1 15,000.00 15,000.00
5 Office Cabinets 5 10,000.00 50,000.00
6 Sofa Set for Office 1 50,000.00 50,000.00
7 Electrical Fittings and Installation 1 150,000.00 150,000.00
8 Electrical Installation Fee (10%) 15,000.00 15,000.00
9 Signage 2 10,000.00 20,000.00
10 Air Conditioners 2 50,000.00 100,000.00
11 Fire Extinguishers 15 2,500.00 37,500.00
12 Computer Set (includes UPS) 3 40,000.00 120,000.00
13 Printers 3 10,000.00 30,000.00
Sound System (includes speakers and
14 1 50,000.00 50,000.00
microphones)
TOTAL OFFICE EQUIPMENT, FURNITURES AND FIXTURES 745,500.00

e. Transportation/Vehicle Requirement
The following details presents the required transportation/vehicle for the
proposed project:
Estimated
Estimated Total
Transportation Vehicle Quantity Cost per
Costs (in PhP)
Unit
1 Delivery Truck 2 3,000,000.00 6,000,000.00
2 Service Vehicle (pick up) 1 2,000,000.00 2,000,000.00
TOTAL TRANSPORTATION VEHICLE 8,000,000.00

f. Human Resource Requirement

The table below shows the recommended human resource requirement for
the project, to wit:

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 Salary Categories
No. Description
A B C D
Supervisor/Quality
1 1
Control
2 Accounting Personnel 1
3 Inventory in Charge 1
Warehouse/Inventory
4 2
Clerk
5 Sales Staff 1
6 Purchasing Staff 1
Maintenance
7 1
Personnel
8 Unskilled Workers 8
9 Helper 3
11 Driver 3
12 Security 3
Total No. of Staff 1 2 4 18
Working Hours per Day 8 8 8 8
Man-Months per year 12 12 12 12
Salaries per Month 12,000.00 10,000.00 8,000.00 6,000.00
Salaries per Year 144,000.00 240,000.00 384,000.00 1,296,000.00
TOTAL SALARIES &
WAGES 2,064,000.00

g. Procurement Plan
The table below shows procurement plan in the purchase of rice (wherein: the
average purchasing price is @ PhP17.00 per kg, 2 cropping per year)
Estimated Purchases (Palay @ average
No. Year
purchase price of PhP17.00 per kg)
1 Year 1 9,996,000.00
2 Year 2 12,514,890.00
3 Year 3 16,195,730.00

h. Assumptions
Based on the capacity utilization of 65%, the details of assumptions in
computing the cost and revenue generation of the proposed unit are provided
in the following tables:
Husking Unit
Year 1 Year 2 Year 3
Projected Husking Output
588 736.17 952.69
per year (in MT)

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 Max husking machinery
1MT per hour
capacity (tonnes)

Rice for polishing 65% 382.2 478.51 619.25

Broken Rice 7% 41.16 51.53 66.66
Powder 2% 11.76 14.72 19.05
Husk 25% 147 184 238.17
Waste 1% 5.88 7.36 9.53

Rice Polishing
Year 1 Year 2 Year 3
Projected Annual Polishing
Output 382.2 478.51 619.25

POLISHED SILKY RICE 40% 152.88 191.40 247.70

POLISHED NON-SILKY
RIC 40% 152.88 191.40 247.70
POLISHED BROKEN RICE 10% 38.22 47.85 61.93
BRAN 10% 38.22 47.85 61.93

Sales Prices and Service Charges per Kilogram

Year 1 Year 2 Year 3
A. Husking Unit
Broken Rice (PhP per Kg) 2 2 2
Powder 7 7 7
Rice Husking Service
2 2 2
Charge

B. Polishing Unit
POLISHED SILKY RICE 50 50 50
POLISHED NON-SILKY
43 43 43
RICE
POLISHED BROKEN RICE 10 10 10
Rice Polished Service
2 2 2
Charge

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i. Income Statement
The statement below shows an increasing net income over the years, this means that the proposed
business will provide a positive profit over its lifetime, to wit:

Nueva Vizcaya Commercial Rice Hub

Projected Income Statement
For the Periods Ended Year 1 to 3
Year 1 Year 2 Year 3
Sales Revenue
Polished Silky Rice 7,644,000.00 9,570,000.00 12,385,000.00
Polished Non-Silky Rice 6,573,840.00 8,230,200.00 10,651,100.00
Polished Broken Rice 382,200.00 478,500.00 619,300.00
Broken Rice 82,320.00 103,060.00 257,180.00
Powder 82,320.00 103,040.00 133,350.00
De-Husking Services 117,600.00 147,240.00 211,700.00
Polishing Services 117,600.00 147,240.00 211,700.00
Sub-Total 14,999,880.00 18,779,280.00 24,469,330.00
Cost of Goods Sold
Purchases 9,996,000.00 12,514,890.00 16,195,730.00
Sacks 117,600.00 147,234.00 190,538.00
Sub-Total 10,113,600.00 12,662,124.00 16,386,268.00
Gross Profit 4,886,280.00 6,117,156.00 8,083,062.00
Administrative Expenses
Utilies Expenses (1/2 of 1% of Gross Sales) 74,999.40 93,896.40 122,346.65
Communication Expenses 50,000.00 50,000.00 50,000.00
Miscellaneous (1/2 of 1% of Gross Sales) 74,999.40 93,896.40 122,346.65
Salaries and Wages 2,064,000.00 2,064,000.00 2,064,000.00
Sub-Total 2,263,998.80 2,301,792.80 2,358,693.30

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Operating Expenses
Gas and Oil (1/2 of 1% of Gross Sales) 74,999.40 93,896.40 122,346.65
Repair and Maintenance (1% of Gross Sales) 149,998.80 187,792.80 244,693.30
Depreciation - Building and Infrastructure 132,000.00 132,000.00 132,000.00
Depreciation - Machinery and Equipment 461,333.33 461,333.33 461,333.33
Depreciation - Office Equipment, Furnitures and Fixtures 192,300.00 192,300.00 192,300.00
Depreciation - Transportation Vehicle 450,000.00 450,000.00 450,000.00
Sub-Total 1,460,631.53 1,517,322.53 1,602,673.28
Net Income 1,161,649.67 2,298,040.67 4,121,695.42

Nueva Vizcaya Commercial Rice Hub

Projected Cash Flow
For the Periods Ended Year 1 to 3
Year 1 Year 2 Year 3
Cash, Beginning 10,000,000.00 12,514,883.00 16,195,791.00
Less: Purchases 9,996,000.00 12,514,890.00 16,386,268.00
Add: Sales Revenue 14,999,880.00 18,779,280.00 24,469,330.00
Less: Cash Expenses 2,488,997.00 2,583,482.00 2,725,733.25
Cash, Ending 12,514,883.00 16,195,791.00 21,553,119.75

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j. Financial Analysis
The following Tables below shows that this proposal is feasible as it shows promising indicators, based on
accounting rules on financial analysis, as shown below:

Return on Investment 3% 6% 10%

Total Project Cost - 40,179,500.00

Cash Flow - 1st Year 12,514,883.00
Cash Flow - 2nd Year 16,195,791.00
Cash Flow - 3rd Year 21,553,119.75
Internal Rate of Return 11%

Balance Period
Total Project Costs - 40,179,500.00
Cash Flow - 1st Year 12,514,883.00 - 27,664,617.00 1 year
Cash Flow - 2nd Year 16,195,791.00 - 11,468,826.00 1 year
Cash Flow - 3rd Year 21,553,119.75 - 6 months
Payback Period 2 years and 6 months

Total Project Costs - 40,179,500.00

Cash Flow - 1st Year 12,514,883.00
Cash Flow - 2nd Year 16,195,791.00
Cash Flow - 3rd Year 21,553,119.75
Net Present Value @ 10% ₱705,268.62

Break-Even Point BEP, Sales BEP, in units

Polished Silky Rice 3,935,523.64 78,710.47
Polished Non-Silky Rice 3,384,550.33 78,710.47

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Polished Broken Rice 196,776.18 19,677.62
Broken Rice 42,382.56 21,191.28
Powder 42,382.56 6,054.65
De-Husking Services 60,546.52 30,273.26
Polishing Services 60,546.52 30,273.26

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