Table of Contents

NVPFIA PALAY PROCESSING AND MARKETING

2
BUSINESS CONCEPT
EXECUTIVE SUMMARY 4
RATIONALE 5
ABOUT THE PROPONENT GROUP 6

BRIEF DESCRIPTION OF PROJECT AND SERVICES 7

CRITICAL FACTORS 10
GEOGRAPHIC LOCATION 11

POTENTIAL TARGET CUSTOMERS/MARKETS 12

PROJECT COST SUMMARY 12

a. Project Cost 12
b. Space Requirement 13
c. Machinery and Equipment Requirement 14
d. Office Equipment, Furniture and Fixtures
Requirement 15
e. Transportation/Vehicle Requirement 16
f. Human Resource Requirement 16
g. Procurement Plan 17
h. Assumptions 17
i. Projected Income Statement 19
j. Projected Cash Flow 20
k. Financial Analysis 21

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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:
/ - High costs of rice within the market;
Risks/Opportuniti - Low cost of palay from buyers/traders;
es - 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      
5,000,00
A Land  
0.00 5,000,000.00
Building and 7,150,000
B  
Infrastructure .00 7,150,000.00
Machinery and 6,920,000
C  
Equipment .00 6,920,000.00
Office
745,500
D Equipment,Furnitur  
.00 745,500.00
es and Fixtures
Transportation 8,000,000
E  
Vehicles .00 8,000,000.00
Pre-Operating 300,000
F  
Expenses .00 300,000.00
28,115,500.0
  SUB-TOTAL 23,115,500.00 5,000,000.00
0
Working Capital     -
Initial Working
G 10,000,000.00   10,000,000.00
Capital
I Salaries & Wages 2,064,000.00   2,064,000.00
12,064,000.0
SUB-TOTAL
  12,064,000.00 - 0
TOTAL PROJECT COST 35,179,500.00 5,000,000.00 40,179,500.00
11. Revenue and Its 14,999,880 18,779,28 24,469,330
Collection Sales Revenue .00 0.00 .00
10,113,600 12,662,12 16,386,268
Less: Cost of Goods Sold .00 4.00 .00
Gross Profit 4,886,280.00 6,117,156.00 8,083,062.00
Less:Administrative 2,263,998 2,301,79 2,358,693
Expenses .80 2.80 .30
1,517,322.5
Operating Expenses 1,460,631.53 3 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
BEP, in Sales:
 Polished Silky Rice – PhP3,935,523.64
 Polished Non-Silky Rice – PhP3,384,550.33
BEP, in Units:
 Polished Silky Rice – 78,710.47
 Polished Non-Silky Rice – 78,710.47

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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

The Rice Value Chain starts with the provision of inputs to produce
paddy, and ends with the consumption of milled rice. The Rice Value
Chain is dominated by a traditional multi-layered supply chain with
interconnected chain actors composed of competing farmers, paddy
traders, millers, and rice traders in each segment and, oftentimes, with
the engagement of brokers in both paddy aggregation and rice
distribution, thereby, increasing marketing cost.

The major constraints identified in the Rice Value Chain in the Province
of Nueva Vizcaya (based on key informant interview with the Nueva
Vizcaya Provincial Federation of Irrigators Association, Inc.) included
high production and marketing costs of paddy and rice attributed to low
yield, high labor cost and material inputs, and insufficient crucial
infrastructure and market facilities (e.g., modern mills, dryer, cheap
transport, and energy), which result in high domestic paddy and rice
prices, and low competitiveness of the entire rice value chain.

To enhance the level of competitiveness, the rice industry should

concentrate on generating and promoting yield-increasing, postharvest
loss-reducing, and cost-minimizing technologies, as well as those that
improve overall efficiency in the Rice Value Chain such as investments
in enabling infrastructure, and facilities for transport, handling, storage,
drying and milling. Thus, this proposal.

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 ABOUT THE PROPONENT GROUP

The Nueva Vizcaya Provincial Federation of Irrigators Association, Inc.

(NVPFIAI) is duly registered to the Securities and Exchange
Commission (SEC) on 25 June 1995. NVPFIAI is the umbrella
organization of Irrigators’ Associations from the 15 component
municipalities of the Province and registered with by the National
Irrigation Administration (NIA) supported by the Department of
Agriculture (DA) and the Provincial Government of Nueva Vizcaya.

NVPFIAI manages and operates the province’s irrigation systems

which benefits 39,292 farmers and other agriculture workers
through the 31,853.05 hectares of farmlands. NVPFIAI has more than
400 farmer-members within the province.

VISION

NVPFIAI as an efficient and effective Federation of Irrigators

Association fulfilling the needs of IA members contributing to the
inclusive growth of the province and in the improvement of the farmers’
quality of life.

MISSION

To act as a linkage to National Government, Local Government Units

and to private institutions for the acquisition and funding support for
irrigation systems, farm equipment, post-harvest facilities and capacity
trainings to IA members to improve agricultural productivity and
increase farmers’ income.

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7|Page
 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

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 months of 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 65%
Broken Rice 7%
Powder 2%
Husk 25%
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

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 Transportation
E 8,000,000.00   8,000,000.00
Vehicles
Pre-Operating
F 300,000.00   300,000.00
Expenses
23,115,500.0
  SUB-TOTAL 5,000,000.00 28,115,500.00
0
Working Capital    
10,000,000.0
G Initial Working Capital   10,000,000.00
0
I Salaries & Wages 2,568,000.00   2,568,000.00
12,568,000.0
SUB-TOTAL 12,568,000.00
  0 -
35,683,500.0
40,683,500.00
TOTAL PROJECT COST 0 5,000,000.00

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.

Figure: Proposed Plant Layout

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 Figure: Proposed Perspective View

Specific details of space requirement and cost related to building and

infrastructure is given below:
Estimated Required Estimated
Estimated Total
Building & Infrastructure Area (in square Cost per
Cost (in PhP)
meters) Square Meter
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
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:

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 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
2 1 383,890.00 383,890.00
a 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
4 1 260,169.00 260,169.00
structure driven by 1.0 hp electric motor
2 unit polisher - vertical arrangement, mounted
5 on a steel base structure, each unit driven by 20 2 277,485.00 554,970.00
hp 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
7 1 690,716.00 690,716.00
motor 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
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

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 The following are recommended furniture and fixtures for the project:
Estimated Estimated Total
Office Equipment, Furnitures & Fixtures Quantity
Cost per Unit Costs (in PhP)
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 Unit Costs (in PhP)
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:
No Salary Categories
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

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 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
144,000.0 384,000.0 1,296,000.0
Salaries per Year 240,000.00
0 0 0
TOTAL SALARIES & 2,064,000.0
WAGES       0

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)
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% .88 7.36 9.53
Rice Polishing
Projected Annual Polishing
Output   382.2 478.51 619.25
POLISHED SILKY RICE 40% 152.88 191.40 247.70
POLISHED NON-SILKY 40% 152.88 191.40 247.70
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 RIC
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. Projected 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
Operating Expenses

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 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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