Initial Investment

Equipments No. of Units Unit Price Total Price

Dumb bells 50 1,100 55,000
Tread Mill 4 35,000 140,000
Cycle 4 10,000 40,000
Leg Press 4 60,000 240,000
Cross Trainer 4 20,000 80,000
Lat Pull Up 4 50,000 200,000
Seated Leg Extension 4 115,000 460,000
Music System 2 185,000 370,000
Cable Cross Bar 2 85,000 170,000
Large Mirror 2 6,000 12,000
Floor Mat 20 4,000 80,000
Air Conditioner 6 100,000 600,000
TOTAL INVESTMENTMENT OUTLAY 2,447,000

Sales Revenue
Subscription Fees Per month No. of subcribers TOTAL
750 1,500
Total 9 Months' Sales 750 1,000 6,750,000
Total 12 Months' Sales 750 500 4,500,000
TOTAL ANNUAL SALES REVENUE 11,250,000

Per unit/ Per

month/per
Expenses person No. of Units TOTAL ANNUAL
Membership Card 150 1,500 225,000
Utilities Bill 60,000 2 1,440,000
Trainers 25,000 6 1,800,000
Equipment Maintenance 10,000 120,000
Miscellaneous 5,000 60,000
TOTAL ANNUAL EXPENSES 3,645,000
Depreciation
Depreciation expense per year =(Original Price -Salvage Value)/life
244,700

Interest Rate
Private bank (1 year FDR) 6%
Non-bank FI 7%
6.5%
 0 1-5 YEAR CASHFLOW
Initial Investment (2,447,000) 0 (2,447,000)
1 4,660,880
Sales Revenue 11,250,000 2 4,660,880
Expenses (3,645,000) 3 4,660,880
Depreciation (244,700) 4 4,660,880
E.B.T 7,360,300 5 4,660,880
Tax(40%) (2,944,120)
Net Income 4,416,180
Add back Depreciation 244,700 NPV
Annual Cashflow 4,660,880
Since NPV is positive, therefore
 INTEREST RATE
0.065

$19,369,123.18
$16,922,123.18

nce NPV is positive, therefore it will be a profitable business