Technological Institute of the Philippines

363 Pascual Casal St, Quiapo, Manila, 1001 Metro

Manila

FINANCIAL PLANNING MODELS

FIN 002A-ACTCY21S2 - Financial Management

Submitted by:
Queenmacy Concepcion S. Alquillera
Adliana Colin A. Amistoso
Pamela Jean M. Bonifacio
ACTCY21S2

Submitted to:
Mr. Heherson M. Martinez, CPA
 Technological Institute of the Philippines
363 Pascual Casal St, Quiapo, Manila, 1001 Metro
Manila

PROBLEM
After 20 years of being an Overseas Filipino Worker,
your Civil Engineer Father has decided to go home and
set up a business here in the Philippines.
As a student studying the various financial planning
model tools, you want to apply the principle of Economic
Environment Assumption.
You want to help your family and volunteered to make a
study of the current economic condition of the country.
Requirements: Submit a detailed study on the economic
condition of the country and propose a business that you
think is feasible now. Illustrate why that business is
feasible despite of the pandemic.
 Technological Institute of the Philippines
363 Pascual Casal St, Quiapo, Manila, 1001 Metro
Manila

With his 20 years of experience abroad as a Civil Engineer, he has the

enough experience and savings (capital) to put up a small or medium sized
construction firm that can cater small projects such as construction, extensions, and
renovations of houses and small sized buildings.
Additionally, he can put up a business selling construction materials and
repair shop since his profession is related to that. Given the current situation of our
country, only few are able to put up/build houses since most people prioritize the
daily basic needs in this time.
That's why putting up a repair shop or a store for construction materials is
ideal, on top of the construction firm - to ensure that cash flows and ROI from the
invested capital is feasible in short term.

COST-BENEFIT:

DIRECT COST
a.) Direct Material - Material that are needed for the project to be made is
under direct cost, it also benefits the company of project in terms of
increased productivity and cost-savings. Materials are needed when in
comes to building a company.
b.) Direct Labor and Direct Wages - It refers to the salaries and wages of the
employees. It benefits both the employee and the company; it benefits the
employee in terms of having extra pay when they do extra work while the
company benefits from their extra work.
 Technological Institute of the Philippines
363 Pascual Casal St, Quiapo, Manila, 1001 Metro
Manila

INDIRECT COST
a.) Rent - it benefits the company in terms of the building that is needed for
them to rent to have their company running. Without paying the rent the
company cannot use the building too.
b.) Office Expenses - Benefits the company in terms of the production off the
product. It is those costs incurred directly by production and include items
such as raw materials, labor, equipment, power and so on.
c.) Indirect Wages- Indirect salaries and wages are the second form of
compensation from an employer to an employee. They do not directly
benefit the firm and are not paid to an employee for services provided.

SCARCITY
a.) Labor Shortage – An example of an aggregate labor shortage is the aging
population. In a short period of time, many workers will retire and are no
longer available for work anymore. Due to this fact, organizations are
searching for substitutes, resulting in an increase in the need for
replacement.

TRADE-OFF
- In terms of trade-off in this business, at first of-course being OFW for 20
years for sure he does have enough savings to start his own business, but he
also needs to work in his own business for it to have less expenses when it
comes to wages, because he is just starting.

SELF-INTEREST

- In terms of Self-Interest, the owner should put his own self-interest, desire
for money and personal gain, above the well-being of their employees, and
the
 Technological Institute of the Philippines
363 Pascual Casal St, Quiapo, Manila, 1001 Metro
Manila

reputation of the company they work for. So in simple words, the company
should come first before the interest of the owner.

“I accept responsibility for my role in ensuring the integrity of the work

submitted by the group in which I participated.”