Table of Contents

Introduction:...............................................................................................................................................2
Our story:....................................................................................................................................................2
Mission:.......................................................................................................................................................3
Vision:..........................................................................................................................................................3
Company Core Values:................................................................................................................................3
Financial plan:..............................................................................................................................................4
Initial Investment:....................................................................................................................................4
Subsequent Cash Flow:............................................................................................................................5
Cash Flow for month:..........................................................................................................................5
Subsequent Cash flow for 2nd year...........................................................................................................6
Cash Flow for 1 month:........................................................................................................................6
Subsequent Cash flow for 3rd year:..........................................................................................................7
Cash Flow for 1 month:........................................................................................................................7
Subsequent Cash Flow for 4th year:.........................................................................................................7
Cash flow for 1 month:........................................................................................................................8
Subsequent Cash Flow for 5th year:.........................................................................................................8
Cash Flow for 1 month:........................................................................................................................9
Payback period:.......................................................................................................................................9
Net Present Value:.................................................................................................................................10
Internal Rate of Return:.........................................................................................................................10
Conclusion.............................................................................................................................................11
Introduction:
Bakestan are the cake experts and our customers know what they are getting, whether selecting a
designer cakes, cupcake, cake pops, Macarons, Brownies and Naan Khatai from bakisto Lahore
or roaming our website, you will see that quality is our default and we aren’t too boastful to say
that we are the best. If you’ve got it, flaunt it, right? Bakestan is here to serve the nation, it’s our
mission to make your life happier and more fulfilling, and, after all, what is more important than
a delicious bespoke cake made in the honor of your loved one?

Bakestan is a cake company in Lahore, that produces and sells high-end baked goods to retail
and wholesale customers. We aim to provide you with the latest “personalized cakes” and most
popular cake themes to create your memories. You will consistently find the most up to date
cake themes at our online stores

We stock a huge range of the top leading themes that you can rely on.

For amateurs and professionals alike, Bakestan has something for everybody. Check out our
selection of cakes and let us blow your mind. By eliminating the standard administration costs
that custom-made cakes incur, we are able to offer the lowest possible prices to our satisfied
customers with Online Cakes.

Our story:
“We are not making cakes, we are baking moments”

You are not simply sending dessert when you send a cake. You give a moment of happiness,
laughter and conviviality. When you can’t be there to celebrate in person, Bakestan– the cake
company makes it simple with our scratch cakes to delight your family, friends and colleagues;
just like grandma made of whole buttermilk, fresh eggs and sreal butter.

We recognize that exquisite appearance matters as much as the taste, and we take pride in hand-
crafted packaging and craftsmanship of every cake to ensure they meet the highest standards.
Bakestan – the cake company is going the extra mile to make sure we offer an experience that
makes you proud that you’ve selected us to produce the gift people can think about long after the
celebration is over
Mission:
Passionately Creating Delicious Cake Products.

Vision:
To be premier cake company by creating an exceptional product and customer service
experience to new and loyal customers everywhere.

Company Core Values:

Our company Values guide how we work with our customers, each other and are the foundation
for shaping our company culture. The Values are:

1. Accountability: We acknowledge and accept responsibility for actions, products,

decisions, time and policies.
2. Integrity: We will always strive to do what’s right…even when no one is looking.
3. Passion: We are passionate about our business, our brands and show pride in our brands
and heritage. We delight our customers through the high quality of our products and
services. We promote a positive and fun environment. We promote innovative ideas and
solutions.
4. Quality: To establish and maintain high quality standards in services and products and be
curious in seeking improvements.
5. Respect: We will conduct ourselves in a manner that values the individual needs and
contributions of all stakeholders, both internally and externally.
6. Continuous Improvement: We have the courage and determination to be innovative. We
take risks in the pursuit of excellence.
7. Customer Service: We exceed the expectations of those we serve. We work together to
produce extraordinary results.
8. Teamwork: One company, one team, one vision.
9. Love: We care. At the heart of the bakery is a deep appreciation for the principles of
traditional baking, of caring for our customers, community and how we impact the world
we live in.
We are Punjab Food Authority Certified !

Financial plan:
Initial Investment:
Name of Assets Cost RS
Fixed Assets
Oven 40000
Rubber Spatulas 600
Offset Spatulas 1500
Cake Pans 1000
Pastry Bags 700
Beater 7000

Measuring Spoons and Measuring 3000

Cups
Pastry Brush 1900
Serrated Knife 1300
Mixing Bowls 7000
Delivery Motor Bike 45000
Domain Cost of website 5000
Working Capital
Raw Materials 14000
Food Color 7000
Cake Decorating 10000
Box Packing 10000
Edible Decoration 12000
Installation Cost 3000
Total Initial Investment 170000

Subsequent Cash Flow:

Variable Cost Rupees
Electricity and Gas Bills 40000
Salary 35000
Digital Marketing 5000
Petrol 8000
Others 6000
Total 94000
Cash Flow for month:
Sales 20416.67
Variable Cost 7833.33
Fixed Cost 9500

Formula

Subsequent Cash flow= sale-fixed cost- variable cost

Subsequent Cash flow = 20416.67-7833.33-9500

Subsequent Cash flow= Rs.3083.34

For 1 year/12 months’:

3083.34*12= Rs. 37000

1st year Cash flow= Rs. 37000

Subsequent Cash flow for 2nd year

Variable Cost Rupees
Electricity and Gas Bills 40500
Digital Marketing 6000
Petrol 9000
Salary 35500
Others 5000
Total 96000

Cash Flow for 1 month:

Sales 21250
Variable Cost 8000
Fixed Cost 9500

Formula

Subsequent Cash flow= sale-fixed cost- variable cost

Subsequent Cash flow = 21250-9500-8000

Subsequent Cash flow= Rs.3750

For 1 year/12 months’:

3750*12= Rs. 45000

2nd year Cash flow= Rs. 45000

Subsequent Cash flow for 3rd year:

Variable Cost Rupees
Electricity and Gas Bills 41000
Salary 37000
Digital Marketing 6000
Petrol 10000
Others 4000
Total 98000

Cash Flow for 1 month:

Sales 22083.33
Variable Cost 8166.67
Fixed Cost 9500

Formula

Subsequent Cash flow= sale-fixed cost- variable cost

Subsequent Cash flow = 22083.33-9500-8166.67

Subsequent Cash flow= Rs.4416.66

For 1 year/12 months’:

4416.66*12= Rs. 53000

3rd year Cash flow= Rs.53000

Subsequent Cash Flow for 4th year:

Variable Cost Rupees
Electricity and Gas Bills 41500
Salary 38000
Digital Marketing 6500
Petrol 10000
Others 4000
Total 100000

Cash flow for 1 month:

Sales 222916.67
Variable Cost 8333.33
Fixed Cost 9500

Formula

Subsequent Cash flow= sale-fixed cost- variable cost

Subsequent Cash flow = 22916.67-9500-8333.33

Subsequent Cash flow= Rs.5083.34

For 1 year/12 months’:

5083.34*12= Rs. 61000

4th year Cash flow= Rs. 61000

Subsequent Cash Flow for 5th year:

Variable Cost Rupees
Electricity and Gas Bills 42000
Salary 39000
Digital Marketing 7000
Petrol 11000
Others 3000
Total 102000

Cash Flow for 1 month:

Sales 23750
Variable Cost 8500
Fixed Cost 9500
Formula

Subsequent Cash flow= sale-fixed cost- variable cost

Subsequent Cash flow = 23750-8500-9500

Subsequent Cash flow= Rs.5750

For 1 year/12 months’:

5750*12= Rs. 69000

5th year Cash flow= Rs. 69000

Subsequent Cash Flows (Rs.)

1 37000
2 45000
3 53000
4 61000
5 69000

Payback period:
years Subsequent Cash Flows (Rs.) Accumulated cash Flow
1 37000 37000
2 45000 82000
3 53000 135000
4 61000 196000
5 69000 265000

Payback period= 3 years+35000/61000

Payback period= 3 years+0.57*12 months

Payback period= 3 years and 7months

Net Present Value:

Cost of Capital= 11%

years Subsequent Cash Flows Rates Present Value

(Rs.)
1 37000 0.901 33337
2 45000 0.812 36540
3 53000 0.731 38743
4 61000 0.659 40199
5 69000 0.593 40917
Total 189736
NPV= PV-Initial Investment

NPV= 189736-170000

NPV=RS. 19736

Hence the NPV is positive so we will accept the Project.

Internal Rate of Return:

NPV= Rs. 19736 @11% cost of capital for 5 Years

First, we calculate Negative NPV

Cost of Capital= 14%

Years Cash Flows Rates Present Value

1 37000 0.862 31894
2 45000 0.743 33435
3 53000 0.641 33973
4 61000 0.552 33672
5 69000 0.476 32844
Total 165818

NPV= PV-Initial Investment

NPV=165818-170000

NPV= (4182)

IRR=LowerRate+PositiveNPV/PositiveNPV-NegativeNPV*Difference in rates

IRR= 11%+ 19736/19736-(-4182)*5%

IRR= 11%+19736/23918*5%

IRR= 11%+0.83*5%
IRR= 11%+4.15%

IRR= 15.15%

Conclusion
We are starting an online business of selling cakes. The initial investment required to start this
business is Rs. 170000 and their full detail is given in 1st table. The payback period of this
business is 3 years and 7 months. The NPV of this project is Rs. 19736 and the (internal rate of
return) IRR is 15.15%. by showing the payback period, NPV and IRR we accept the project.