Project Title Feasibility Study For Frui

Project Feasibility Study for the Establishment of Fruit and vegetable Production
PROJECT TITLE: - FEASIBLITY STUDY FOR FRUITS AND

VEGETABLES PRODUCTION
PROJECT OWNER:- A Trading PLC.
PROJECT MANAGER:- Mr. Wasyhun Belay
ADDRESS: - AMHARA REGION, SOUTH, WELO, KALO

WOREDA, AREBU KEBELE.
Phone: - ……………………
PROJECT AREA:- AMHARA REGION, SOUTH, WELO, KALO

WOREDA, AREBU KEBELE.
DATE: June, 2019G.C
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Table of Contents
1
Executive Summary.......................................................................................................5
Introduction.....................................................................................................................6
General Background....................................................................................................6
2 Project Objectives........................................................................................................8
2.1 General Objective..................................................................................................8
2.1.1 Specific objective............................................................................................8
Project description.......................................................................................................8
Project Rationale.........................................................................................................9
The significance of the project....................................................................................9
Project Location........................................................................................................10
3The market Study........................................................................................................11
Market Analysis........................................................................................................11
The Demand-Supply Gap..........................................................................................11
Current supply of Mixed use building.......................................................................12
Future market or Demand of commercial Building rental........................................12
Target customers.......................................................................................................13
Marketing promotion and strategy............................................................................13
Competition...............................................................................................................13
The project facilities and Services plan.....................................................................14
4 Technical Studies.......................................................................................................16
4.1 Description of the project Service/ Product mix.................................................16
4.1.1 Land Use Plan...............................................................................................16
4.2 Construction work and Technology....................................................................17
4.2.1 Construction schedule...................................................................................17
4.2.2 Architectural Design & Layout....................................................................17
4.2.3 Structural design...........................................................................................18
4.2.4 Reinforced concrete......................................................................................18
4.2.5 Foundation Design........................................................................................18
4.2.6 Construction Plan and process......................................................................19
4.3 Utilities................................................................................................................19
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5 Engineering and civil works......................................................................................21
5.1 Land, Building and Civil Works.........................................................................21
5.2 Manpower and training requirement...................................................................22
5.2.1 Manpower requirement.................................................................................22
Labor Availability..................................................................................................23
Project implementation..............................................................................................23
Organizational Structure............................................................................................24
Organization and management..................................................................................24
6 Financial analysis.......................................................................................................31
6.1 Repair and Maintenance Cost..............................................................................31
6.2 Depreciation and Amortization...........................................................................31
6.3 Total Revenue......................................................................................................32
6.4 Discounted Payback Period.................................................................................32
6.5 Cash flow.............................................................................................................32
6.6 Benefit cost ratio.................................................................................................32
6.7 Internal Rate of Return........................................................................................33
6.8 Net present value.................................................................................................33
7 Conclusions and Recommendations..........................................................................34
Conclusion.................................................................................................................34
Recommendations.....................................................................................................35
References.....................................................................................................................36
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List of table
Table 1: Office Space Demand Forecast…………………………………………. 12
Table 2: The plan is that the ground will be partitioned in to different rooms…14
Table 3: land utilization Plan ………………………………………….……….…..16
Table 4: Utilities…………………………………………………………………… 20
Table 5: List of Building and Civil Works and Their Costs ……………………..21
Table 6: Manpower Requirement and Annual Labor Cost………………………22
Table 7: project Implementation schedule………………………………………. 23
Table 8: Repair and Maintenance Cost ……………………………………………3
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1 Executive Summary
KEY INFORMATION HIGHLIGHTS
PROJECT OWNER IAM Trading PLC
PROJECT TITLE Fruits and Vegetables production
LAND REQUIREMENT 100,000 M2
PROJECT AREA Amhara region, south welo, kalo woreda, arebu kebele
PRODUCTION CAPACITY
PRODUCTS TO BE MANUFACTURED
Fruits and Vegetables
MARKET Domestic and International
COST OF THE PROJECT
PROJECT LIFE 10 YEARS
NUMBER OF WORKING DAYS 365 DAYS
FINANCIAL VIABILITY ( AT 10% DISCOUNT RATE )
NPV (NET PRESENT VALUE) 54,439,417 BIRR
IRR (INTERNAL RATE OF RETURN) 34.13%
PBP ( PAY BACK PERIOD) 3 year and 9 months
ANALYSIS RESULT
THE PROJECT IS TECHNICALLY FEASIBLE, FINANCIALLY AND COMMERCIALLY VIABLE

AS WELL AS SOCIALLY AND ECONOMICALLY ACCEPTABLE. HENCE, THE PROJECT IS
WORTH IMPLEMENTING.
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2 Introduction
2.1 General Background
Although horticultural crops are important for health and economy the amount and mode of
production are still weak in Ethiopia. Horticultural crops can be differentiated as fruit (permanent
crops) and vegetables (short season crops). Accordingly, permanent crops are long term crops
that occupy the field planted for a long period of time and largely harvested every year and do
not have to be replanted for several years after each harvest. These include tree crops such as
coffee, Enset, Chat, oranges, Mangoes, Bananas, papaya, Avocados…etc. The trees that yield
fruits like orange, Mangoes, Papayas, and others are known as fruit trees (CSA, 2001/02).
More than 47 thousand hectares of land is under fruit crops in Ethiopia. Bananas contributed
about 60.56% of the fruit crop area followed by Mangoes that contributed 12.61% of the area.
Nearly 3.5 million quintals of fruits were produced in the country. Bananas, papaya, mangoes,
and orange took up 55.32%, 12.53%, 12.78% and 8.35% of the fruit production, respectively
(CSA, 2008).
Ethiopia has a comparative advantage in a number of horticultural commodities due to its

favorable climate, proximity to European and Middle Eastern markets and cheap labor.
However, the production of horticultural crops is much less developed than the production of
food grains in the country. On average more than 2,399,566 tons of vegetables and fruits are
produced by public and private commercial farms, this is estimated to be less than 2 percent of
the total crop production. According to recent information obtained from the Central Statistics
Authority, the total area under fruits & vegetables is about 12,576 hectares in 2011. Of the total
land area under cultivation in the country during the same year, the area under fruits and
vegetables is less than one percent (i.e. 0.11%), which is insignificant as compared to food crops.
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At present, many private commercial farms & private farmers are producing fruits and
vegetables both for domestic and export markets in the country. Processing plays an important
role in the conservation and effective utilization of fruits and vegetables. It converts perishable
fresh products to more durable processed products in cases of sluggish markets or when there is
profit- generating demands for processed products. It also helps in generating rural employment.
Besides, processed fruits and vegetables are sources of foreign exchange earnings. In Ethiopia,
the number of fruits and vegetables processing industries is limited. Currently, there are only 5
fruits and vegetable processing plants in the country. These plants presently process limited
products: tomato paste, orange marmalade, vegetable soup, frozen vegetables, and wine. Most of
the processing plants fall in the small-scale processing unit’s category. In general, processed
products are mainly geared to domestic markets.
Ethiopia is one of the developing countries and around 85% of the total population depends on
agriculture most of the agricultural practice is rain fed crop production. However, due to the
backward method of farming, unreliable rainfall, including population and drought, the nation
faced a series of food shortage. These food shortages were followed by severing famines that
resulted in the loss of the lives of millions of citizens.
Most of Ethiopia’s cultivated land is under rain-fed agriculture. Due to lack of water storage and
large spatial and temporal variations in rainfall, there is not enough water for most farmers to
produce more than one crop per year and hence there are frequent crop failures due to dry spells
and droughts which have resulted in food shortage currently facing the country.
The major source of growth for Ethiopia is still conceived to be the agriculture sector. Hence,
this sector has to be insulated from drought shocks through enhanced utilization of the water
resource potential of the country, (through the development of small-scale irrigation, water
harvesting, and on-farm diversification) coupled with strengthened linkages between agriculture
and industry (agro-industry), thereby creating a demand for agricultural output.
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In line with the above, different regions of the country are working hard so as to promote
irrigated agriculture and boost agricultural production both in quantity and quality.
Ministry of Water, Irrigation and Energy have been widely engaged in promoting irrigation to
make true the country dream. The ministry is working on the development and application of
water resources for sustainable development. Identifying irrigation projects, undertaking
feasibility studies and going to implementation are among the duties considered helpful in using
the water resources.
In parallel, the Ministry of Water, Irrigation and Energy and Ministry of Agriculture have been
widely allowing investors to participate in farming investment whereby the investors together
with the existing farmers feed the fast-growing and hungry industrialization of the country. The
investors play a wide role in transforming the agriculture-based economy of our country to
industry based economy.
It is not only about transforming the economy but also the government is working very hard on
quality production to make our country competing in international markets. In this point of view,
the investors also play a very great role.
Hence, it is obvious that the agricultural system has to be improved and irrigation practice should
be spread extensively to bring about sustainable food self-sufficiency and to earn foreign
exchange. Ethiopia has ample source of surface and subsurface water, resulting from this it is
named as” The water tower of East Africa.” Moreover, the irrigation potential is estimated to be
about 4025 million hectares of which only 5.8% is irrigated. (Source; a study carried out by
international water management institute-IWMI)
Nowadays, the implementation of small and medium scale irrigation scheme is being given
priority in the water sector development strategy of Ethiopia. These are the reasons where the
government provided farmland in a different part of the country including proposed area exists in
Amhara National Regional State, DWZ, Kalo Woreda, Arebu Keble.
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2 Project Objectives
2.1 General Objective
The major goal of this project is to contribute towards the growth of the Agricultural sector. Its
specific objectives include the following.
2.1.1 Specific objective
 To construct and develop quality and quantity product that enable to provide standard goods
to consumer.
 To undertake trading and other refuted business activities that enable to generate a reasonable
to the invested capital.
 To develop modern business centre that would provide quality product on standard.
 To create employment opportunities.
 Contribute towards the eradication of poverty.
 To establish economically viable, socially acceptable and environmentally friend farm.
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2.3 Project description
Horticulture covers a wide range of products which can be grouped into vegetables, herbs,
mushroom, and flowers. The South Welo Zone has great potential and suitable natural resources
for the production of these groups of horticultural crops. In fact, this project refers to only
essential fruits & vegetable production which includes mango, papaya, tomato, and onion. These
products can be supplied as green and fresh, chilled or frozen and packed depending on the
market location and requirement. Combining different kinds of fruit & vegetable production
create a better opportunity for crop rotational practices and give the advantage of utilizing
common faculties such as washing, cleaning cooling and storage facilities. Plus marketing fruits
& vegetables facilitate an increase in marketable volume by attracting more customers.
The South Welo Zone has large areas and water resources suitable for the production of fruits
and vegetables. Compared to cereals, pulses and oil crops, fruits and vegetables are very high in
productivity per unit of land which can play a substantial role to increase the food supply area.
With a growing urban population, which is totally market dependent, and the current food supply
shortage, expansion in fruit and vegetable production will play a significant role in increasing the
food supply of the zone.
Planned land use on farm site includes the construction of the house for residence and store,
planting of different verities of permanent and annual tree and crop species. Specifically: Mango
species (3ha), Papaya (3ha) and 3ha land area set for vegetable production, 1ha for construction
and environmental protection/conservation. Besides production, the organization also plant tree
species within farm like following irrigation and drainage channel.
On the other hand, unbalanced and inadequate nutritional status of the people is still a central
problem in the zone. Deficiency of essential food elements, such as protein, vitamins, and
minerals are widely observed as basic food intake is below the minimum requirement in the area.
Increase in blindness due to ΄Vitamin A΄ deficiency is an alarming circumstance in the country.
Therefore, fruits and vegetables are important sources of vitamins and minerals.
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2.4 Project Rationale
Agriculture is the cornerstone of the development policy of the Government of Ethiopia.

According to the Rural Development Policy and Strategy document, the basic ingredient and
resource the country has for agricultural development is the abundant land and labor. Most of the
western lowlands are endowed with water resources are virgin and fertile. Up to recently, the
areas were not developed due to lack of capital and technology. Therefore, there is a strong
commitment from the government to make these fertile lands available for investors that have the
capital and technology to develop.
The existing promising investment opportunities, the demands of goods needs along with
relatively sound investment support made by the government in such kinds of feasible projects,
compelled the project promoter to initiate the multipurpose oriented business project to be
established. Despite the promising business opportunities, the trend on such kinds of investment
found to not enough.
Therefore, the existing shortage or absence in the supply of these products, along with its better
location and infrastructure access, the escalating trend of urbanization and business activities,
thus it is with such reason that this project is identified and proposed and assumed to be more
profitable.
In general, the country’s privatized and free market economy; good governance creates a
favorable environment for the development of investment for private investors.
2.5 The significance of the project
The envisaged project deemed to add to the economic development of the region in general in
specific with following ways:
A. Source of Revenue
As public policy of any nation, the government collects different forms of taxes from different
business organizations and individuals. Among the different forms of taxes, business income
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taxes, payroll income tax and VAT are collected from undertaking business activities. Therefore,
the farm will serve as sources of revenue for the city.
B. Employment opportunity
One of the problems that our country faced is unemployment. Therefore, the current objective of
the government is working on tackling the problem of unemployment and fostering the
development process either through creating self employment or employment in other
organization. Hence, this project will hire 20 individuals and more than 50 individual during
every season.
2.6 Project Location
The license area is located in Amhara National Regional State, South Welo Zone, Kalo Woreda.
The total area of the project is 10ha.
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3 The market Study
3.1 Market Analysis
Fresh and Processed Fruits and vegetables have a large domestic market in Ethiopia,
significantly higher than the exported volumes. The size of the Ethiopian population is currently
estimated at about 100 million. This is a strong indication of the existence of large potential
demand for fresh fruit and vegetable crops in the country. The other customer of Ethiopian fresh
fruits and vegetables is processing plants, i.e., tomato processing plants and vegetable canning
factories which require tomato and various types of vegetables for processing. The demand for
fruit on the local market is high. This is a strong indication of the existence of investment
opportunities in fruit supply for the local market
Ethiopia exports fresh fruits and vegetables to the international markets. The major markets for
Ethiopian fresh fruits and vegetables are the European Union, the Arab countries and the
regional markets. Thus, there is a reliable demand for these Ethiopian products during a
particular period and a great volume. Therefore there is a strong business image for vegetables
and fruit markets.
3.2 The Demand-Supply Gap
There has been a significant growth in the number of local and international trades across the
country. This increase is mainly associated with the stimulation of economic activist and partly
due to an increase in the demand of fruit and vegetable production. Even though there is a lack of
quantitative estimates that depict the actual demand and also the annual growth rate commercial
facilities are scarce in the region. As a result there is a large gap between the developed and that
of the supply for fruit and vegetable production hence this project would not face any problem of
demand scarcity for it market and it would provide good goods to customers.
The price of fruits and vegetables is volatile and seasonal. Generally, fruits and vegetables are
much cheaper in rainy seasons. However, even in the rainy seasons the average price of fruits
and vegetables at major towns is estimated on average at birr 25 and 15 per kg respectively. It is
based on cost and competitors price.
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2009 2010 2011

Tomato 951,920Kg 1,509,352 Kg 1,558,240 Kg
Mixtures 339,039 Kg 980,419 Kg 1,237,883 Kg
Source: Ethiopian Customs Authority
3.4 Future market or Demand of fruits and vegetables
The future demand for fruits and vegetables is promising due to two main factors. First, an
increase in population in general and urbanization, in particular, is expected to amplify the
domestic consumption of fruits and vegetables. At the same time, an increase in income
inevitably improves the per capita consumption of fruits and vegetables in the future.
Consequently, with a conservative growth rate of 3% per annum, the future demand for
vegetables is forecasted as shown below.
Table 1: Future Demand
Year Projected Demand (qts)
2006 100,000
2007 103,000
2008 106,423
2009 109,615
2010 112,904
2011 116,291
2012 119,780
2013 123,373
2014 127,074
2015 130,886
2016 134,698
2017 139,198
3.5 Target customers
The target customers of this envisaged project include:-
 The surrounding community

 District ,regional and federal government
 Agricultural research institutes
 Agricultural technology and equipment suppliers
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 Ginning factories
 Agro-processing factory
3.6 Marketing promotion and strategy
In order to penetrate and gain considerable market share, one of the major marketing strategies
for the project is consistently rendering quality service to its tenants. Due emphasis must be
placed on improving quality of service. The major marketing strategies to promote the project
and gain considerable market share include:
 Advertising through different means focusing on the existing service and products.
 Promote in association to the key location and nearby business
 Working on sustained promotional work.
 Working on public relations to reach and influence key personas and organization with a
capacity of making decision.
 Keeping the quality of its service/ product and consistently improving with changing
situations.
 Seasonal discount pricing different others customer centric marketing strategies will be
used by the farm.
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3.7 Competition
There are different forms of competition that may face the envisaged Fruit and vegetable farm.
These are price and non-price based competition. Moreover, there are different competitors that
will compete with the project either directly or indirectly. But the Fruit and vegetable farm under
discussion has diversified marketing strategies that could enable it to Cope up with the different
competitors in the market. Moreover, it will frequently conduct competitors research which
focuses on, the strength and the weaknesses, the different competitors’ strategies, the techniques
they use in rendering the service, their customer handling methods, and others.
3.8 The project facilities and Services plan
In order to provide Fruit and vegetable farm of a high standard, it has been planned to construct
and develop the infrastructure and facilities that would viable to meet the requirements of an
international standard farm. Accordingly, various facilities will be constructed phase by phase
starting with the most needed ones that are essential to commence the operation of its farm
activities.
Since the project will be engaged in Fruit and vegetable the main sources of its annual revenue
would be from the domestic and international product sell. Based on the market price of Fruit
and vegetable in the area, the envisioned project set the fair price (Before VAT) for its product.
Feature of the sector
Agriculture is the backbone of the economy and the most volatile sector mainly owing to its
dependency on rainfall and the associated seasonal shocks that affect productivity. More than
85% of the Ethiopian population depends on agriculture for their livelihood. Within the context
of the Ethiopian economy, the Agriculture sector traditionally includes economic activities such
as crop and livestock production in which the crop sector has been the major driving element.
The Ethiopian economy is basically comprised of smallholder farming as well as medium and
large scale commercial farming. Relatively speaking, commercial farms are not significant in
terms of area cultivated and volume of production, even though the role has slightly increased in
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view of the recent phenomena associated with the establishment of flourishing cut flower farms
in the country which is largely dominated by foreign investment.
Ethiopia is potentially a wealthy country, endowed with abundant resource conducive to

agricultural development such as fertile soil and good rainfall over large regions. Agriculture
accounts for the lion share of the foreign exchange earnings. The sector contributes about 90% of
the total export of commodities. The country’s industrial development programs are closely tied
to value-added processing of agricultural outputs with equal emphasis to both large & medium
scale as well as small scale manufacturing industries. The sector registered significant growth for
the last four consecutive years due to good climatic condition accompanied by increasing crop
productivity through agriculture input intensification and area expansion.
Beneficiaries
The country will get a contribution to its national income through domestic consumption and
export. This project will provide employment opportunity to the local population, this will raise
the living standards of the people working in this project, and they also learn the latest
technologies in crop production and also make use of them in their own farm. The regional
government will also generate revenue in the form of land rent will be an additional source of
income on land resources.
The company, which is making an investment on the land and doing a lot of agricultural
production (fruit and vegetable) activities in developing the land will be benefitted in terms of
return on their investment during the lease period.
Past and Present intervention
Fruit and vegetable production project has a technically strong, knowledgeable and experienced
team to execute the project on time. With the vast knowledge base in agri-business activities, the
company has tangible experience in making this project a success. Conflict in the area may retard
plan of project.
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Justification of the project
Ethiopia has huge investment potentials for agricultural development. Currently, investment in
the agriculture sector is found to be more attractive and profitable in diverse sub-sectors ranging
from food products, industrial raw materials to bio-fuel. The agriculture sector accounts for 47%
of the Gross Domestic Products of the country, provides 85% of employment and 90% of foreign
currency earning.
Moreover, the country has a huge market potential for crop and livestock produced with
comparative advantage to the Middle East, Europe, and Asia. For the past five consecutive years,
the agriculture sector was growing faster with more than 11% average annual growth. In addition
to the contribution to the national growth, the growth has triggered the increase in the domestic
market has for both livestock and food crops.
Looking at the agro-climatic condition i.e. average temperature, rainfall, physic-chemical

properties of the soil and the distribution of the rainfall give an indication that the proposed land
is suitable for cultivation of various crops but especially fruit and vegetables. The physic-
chemical properties of the soil indicated in the information sheet provide further confidence for
the success of the project. Moreover, the planning on the financial part of the project i.e.
investment, cash flow, return on investment, profitability and the cost-benefit ratio will show a
positive trend.
The expertise in the marketing of farm-produced in the international market will provide an
additional benefit to improve the financial health of the organization. The statistic indicated in
the financial report will provide us confidence in the project. It justifies the investment and
returns on the investment.
Support for the project
The financial support i.e., the equity infusion in the form of cash and kind for this project on
investments shall be received from promoters. The company shall receive equity infusion in the
form of cash or kind from any of these mentioned companies hereby for its project. The
company shall take the financial support in the form of project loan from either development
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bank of Ethiopia or commercial bank of Ethiopia. In addition to our in-house team, we are also
interacting with the Ethiopian Institute of Agriculture Research to get timely support and
valuable advice in this project based on their experiences.
We are also expecting support from Agricultural office and responsible government officials for
identification of suitable land and facilitation of the documentation and import of farm
machinery and equipment, farm inputs for the success of this project. It appears to be a joint
project of Fruit and vegetable production farm project and Ministry of Agriculture, Government
of Ethiopia, as we need lots of support from the Ministry of Agriculture at various level of
implementation of activities in this project. Without their help and support, it will not be
possible to make this project a success.
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4 Technical Studies
4.1 Description of the project product
The envisioned fruit and vegetable farm will provide different products to the different customer
groups for different purpose. The product will have tomato, onion, mango and papaya.
4.1.1 Land Use Plan
The total land required for the envisioned project is estimated to be 1174m 2. The total area for the
construction of the building will be 1100m2, as revealed below.
Table 3: land utilization Plan
No Description Land M2
Basement Ground First floor-Twelve floor
1 Building (G+12)
1.1 Basement 1100
1.2 Ground 1100
1.3 First floor-Twelve floor 1100
Total 1100
4.2 Construction work and Technology
4.2.1 Construction schedule
The construction project is proposed to be started on July 2019, and is expected to be finished on
July 2022. As seen in the abbreviated construction schedule above, a majority of the schedule’s
time is made up of five major activities; concrete, building Enclosure, masonry, mechanical and
Electrical install. Concrete activities include processes such as placing foundations and slab on
deck. The Building Enclosure Phase includes erecting the scaffolding that will allow for exterior
sheathing installation and bricklaying.
Mechanical and Electrical install coincide with each other due to the need for coordination
between the two divisions. There are several periods of construction during the schedule in
which there are multiple construction activities occurring at the same time.
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The construction site must be organized accordingly as these processes take place. As with any
construction project, the goal of the schedule will to complete all construction activities before
the required Date of completion.
This date of completion is practical based on the time of year in which the building will be
completed. The team allowed a two week contingency for any setbacks. Typically, winter
construction tends to cause unforeseen delays that negatively impact a construction project.
These conditions can and will almost undoubtedly impact the project schedule by causing
unforeseen delays and project inefficiency.
4.2.2 Architectural Design & Layout
Although functional spaces for the project were laid out in significant detail, the rest of the
building had designated spaces but set layouts. It was at the discretion of the project promoter to
devise typical layouts for the non-detailed commercial and office spaces. To make sure that the
building’s layouts were practical, the project owner researched typical architectural layouts for
laboratory and executive office spaces. The walls and partitions throughout the floor will
congruent with the structural frame and column locations.
4.2.3 Structural design
One of principle deliverables of the project is the structural design of the building. The structural
bays were coordinated with the layout of the building adjustments will be made to the bays if
specific layouts are necessary. The frame will be made up of a grid with repeating standard
structural bays. Included in the structural system are bay sizes, shape and size of structural
members, floor compositions and curtain walls. These elements were established to resist gravity
ad lateral loads as appropriate.
The gravity load design will completed for two frames; one of structural steel and one of
reinforced concrete. The structural steel frame will chosen for further design based on cost per
square foot, local availability of material and constructability considerations, such as erection
and fabrication. The steel system will then designed for lateral loading with necessary adjustment
being made to framing.
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4.2.4 Reinforced concrete
The project group prepared hand structural design calculations for a typical bay of a reinforced
concrete frame. In all reinforced concrete bay designs, a superimposed dead load of 8 pounds per
square foot will be assumed for mechanical equipment, floor coverings and ceilings.
Similarly, the design of the typical bay accounted for the use of different commercial space, in
which a live load of 1000 pounds per square was assumed. Loads will be calculated based on the
requirements of the minimum Design loads for Buildings and other Structures.
4.2.5 Foundation Design
The design of a superstructure may be accurate, have considered all possibilities and still fail
because the substructure is incapable of distributing the applied loads to the supporting soil.
Foundation design takes more into consideration than merely the loading from the columns.
While the main part of the project focused on the structural frame and its alternate designs, a
preliminary foundation plan was designed based upon maximum load carried from the
superstructure through the columns. The foundation design conducted by the project team
consisted of the selection of foundation type, determination of the bearing capacity and the
design for typical interior and exterior spread footings.
4.2.6 Construction Plan and process
The construction process for this project is normally a disjointed three mages development by
which the conceptualized need of the promoter of this project is translated into a functional
facility that will meet their needs in terms of time, cost and quality.
Based on a general program of the project owners the consultant who is going to be hired makes
site studies, develops structural designs, prepares drawings and specifications, determines
quantities involved and estimated the resultants costs. All these activities will be done in the first
phase of the project which is the design stage after the document are produced by the designers
have been received, and the works secured the project is supposed to enter the tendering stage.
At this stage contractors study the project document analyze and subsequently determine the
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construction methods, built up their unit rates and submit their bids for the works. The promoter
of this project intends to compare the bids and award the contract for the lowest responsible
bidder. This, is of course, presupposes that the favorable proposal does not exceed the allocated
budget.
After the award is made and the contract signed between this project owners and the contractor,
the project constructor is expected to prepare and submits a detailed construction program which
includes material schedule, manpower requirement and cash flow forecast.
After the award is made and the contract signed between this project owner and the contractor,
the project constructor is expected to prepare and submits a detailed construction program which
includes material schedule, manpower requirement and cash flow forecast.
4.3 Utilities
A number of utilities world be put in place in order to ensure smooth functioning of the project.
These utilities include:
Table 4: Utilities
No Description Qty. Unit cost Cost (Birr)

1 Electricity supply, kWh 100,000 1.30*10,000 130,000
2 Water Supply m3 50,000 10*500,000 500,000
3
Telephone and Internet Broadband 20,000
4
Fuel, Oil and lubricant 2000 19*2000 38,000
Total 1,188,000
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BUSINESS PLAN FOR MIXED USE BUILDING
5 Engineering and civil works
5.1 Land, Building and Civil Works
The Mixed use building has a total site area of 1174 m2. The building floor area has covered 74
m2 and the remaining 1100 m2 is left for construction. The type of buildings and its
corresponding civil construction cost is given on Table 5.
Table 5: List of Building and Civil Works and Their Costs

No Description Total price
A. SUB-STRACTURE
1 excavation and earth works 279,570.67
2 concrete work 1,936,546.34
Sub total 2,216,117.01
B. SUPER STRACTURE
1 Concrete work
7,753,358.45
2 Block work
551,534.40
3 Roofing
171,108.00
4 Carpentry and joinery
323,760.00
5 Metal works
820,860.00
6 Finishing
3,111,379.44
7 Painting
275,798.88
8 Electrical installation
7,236,330.00
9 Sanitary installation
1,151,022.00
Subtotal
21,395,151.17
A+B
23,611,268.18
Vat (15%)
3,541,690.23
Grand total
27,152,958.40
As shown on Table 5, the total cost of building and civil work is estimated at Birr 27,152,958.40
24
and out of which the proponent has worked more than birr 23.6 million.
5.2 Manpower and training requirement
5.2.1 Manpower requirement
The list of manpower and the annual cost of labor is indicated in Table 6.
Table 6: Manpower Requirement and Annual Labor Cost
Position No Qualification Monthly Annual

SN salary in salary in
Birr Birr
1 General manager 1 BA in management 10,0 120,000
00
2 Building admin 1 BA in Acct/Mgt 8,0 96,000
00
3 Secretary 1 10+2 in secretariat science 3,0 36,000
00
4 HRM Officer 1 10+2 in HRM/Management 4,0 48,000
00
5 Technical and 1 Diploma in building maintenance 8,0 96,000
maintenance manager 00
6 Finance head 1 BA in Accounting 6,0 72,000
00
7 IT Technician 1 Diploma in computer science/IT 6,0 72,000
00
8 Marketer 1 Diploma in marketing 5,0 60,000
00
9 Accountant 1 Diploma in accounting 4,0 48,000
00
10 Guards/Security 4 Basic 2,5 30,000
00
11 General Service head 1 Diploma in Management 6,0 72,000
00
12 Purchaser 1 Diploma in purchasing &Sup Mgt 3,5 42,000
00
13 Electrician 1 10+2 in general electricity 4,0 48,000
00
14 Plumber 1 10+2 in general mechanic 3,5 42,000
00
15 Casher 1 10+1 in bookkeeping 3,5 42,000
00
25
16 Cleaner 5 Unskilled 3,0 36,000

00
17 Maintenance officer 1 10+2 in General mechanic 3,5 42,000
00
18 Driver 1 10 completed 2,50 30,000
0
Total 26 86,0 1,032,000
00
Benefit (20%) 17,2 206,400
00
Grand Total 103,2 1,238,400
00
5.2.2 Labor Availability
Workers for this type of plant are available throughout the year. No foreseeable problems are
expected as most of the work requires no previous skills.
5.3 Project implementation
The project’s implementation is expected to take 24 months. The major activities include Bank
loan processing construction of the building, cleaning the area around the building, Procurement
of equipments and start rendering services. The time schedule for major activities is presented
below:
Table 7: project Implementation schedule
SN Activities Date
1 Preparation Project Proposal May 2019
2 Bank loan processing June-July 2019
3 Site Development July 2019
4 Building and construction work August, 2019-July 2022
5 Preparation for service September, 2022
6 Service execution February, 2022
26
5.4 Organizational Structure
5.4.1 Organization and management
Organizational Structure
The organizational structure of the project is designed by including all the necessary personnel
under the right division. At the top of the organizational structure, there will be a manager with
the responsibility of supervising the overall activity of the building. Depending upon the nature
of the center and the amount of work to be performed; there exist auxiliary units under the
general manager.
Employees under each unit will be supervised by the department head that is accountable for the
general manager. General Manager is appointed by the owners
As clearly shown in the organizational structure, the central organization has one general
manager and three main sections. Under the general manager, there are the Marketing
Department, Maintenance and Building administration department. Under building admin dept
there exist two sections i.e., HRM & finance and general service. Further subsections are also
organized under technical and maintenance manager. The following section deals with the duties
and responsibilities of each department.
A. The General Manager’s Duties and Responsibilities
 He/she will plan, organize, direct and control the overall activities of the building.
 He/she will devise policies and strategies that will enable the center to be profitable.
 He/she will incorporate modern technological innovation that will facilitate the service
delivery of the building to increase customer’s satisfaction.
 He/she will plan, organize, direct and control the human and non-human resources of the
building so as to achieve the short and long run objectives of the organization.
B. Building Administration Department
27
The building Administration Department of the multipurpose building has two main sections
(HRM and Finance and General Service section). It has responsibility for undertaking the
following activities;
 manage the human resources and control employee’s activity
 Well, non-human resources of the project, which include; effective handling of the
different resources of the building, and devise strategies of controlling against fraud and damage
 will provide the right material or inventory to the center with the right price at the right
time.
 will plan, organize direct and control the financial transaction of the building by using all
the necessary documents.
 Accountant and casher that will collect money from the customers
 will develop sound financial control system by developing modern financial control
systems.
 will prepare the annual financial statements and prepare condensed reports for both the
General Manager and another concerned government body.
 Follow the overall status of the business and provide maintenance and repair services
C. The Marketing Department
 will handle the overall marketing activities of the organization which includes planning,
organizing, directing, and controlling.
 will develop the marketing strategies for future multipurpose building development
 will develop effective customer handling strategies.
 Execute the promotion methods.
A. Technical and maintenance manager
28
 Will handle the overall physical maintenance and related issues
 Will make sure electricity and back up is organized.
 Follow up security issues and educate tenants
 Works in collaboration with general service to make sure tenants are well served
Owners
General Manager
Building Maintenance Marketing

administration Department Department
Personnel Promotion
Finance
&Property
Officers
Figure 1.organizational structure
IT, Supervisors
Electricity
29
5.6 Financial Requirement and Analysis
The financial resource is a prime resource for undertaking any activities. Hence for
implementing this mixed use building a total of 34,512,183.20 ETB is required. From this 30%
10,353,655 birr will be covered by the promoter of the project while the rest 70% (24,158,528)
will be covered through loan from bank at the prevailing interest rate.
Therefore the said amount of finance is needed for undertaking the following.
5.1 fixed Investment

A. Land, Building & Construction
S.N Description of works Total Cost in birr
1 Building construction 27,152,958.40
2 Site Development 50,000
3 Design and supervision 120,000.00
4 1st Year land lease 422,640
Total 27,745,598.40
B. Building Machineries and Equipments

SN Description Measure Qty Unit cost in Total cost in
ment Birr Birr.
1 Generator Unit 1 300,000.00 300,000.00
2 Carpentry tool box Set 1 27,000.00 27,000.00
3 Electrician tools box Set 1 18,500.00 18,500.00
4 Plumber tools kit Set 1 12,300.00 12,300.00
5 Fire extinguisher Unit 12 16,000.00 192,000.00
(Security Equipment)
6 Elevator Unit 1 750,000 750,000
Total 1,123,800 1,299,800
C. Vehicle
SN Description UOM Qty Unit Cost in Total cost in Birr Remark
Fr.
1 Mini-Bus Unit 1 300,000.00 300,000.00 Duty Free
Total 300,000.00
30
D. Office Equipments
SN Description Measurement Qty Unit cost in Total cost in
birr Birr
1 Managerial tables Unit 1 12,600.00 12,600.00
2 Managerial chairs Unit 1 19,500.00 19,500.00
3 Office table with chair Unit 7 12,000.00 12,000.00
4 Secretarial table with chairs Unit 1 8,500.00 8,500.00
5 Computer with chairs Unit 1 15,000.00 15,000.00
6 Shelf Unit 3,500.00 3,500.00
7 Filing cabinets Unit 1 1,500.00 1,500.00
8 Guest chairs Unit 1 4900 4900
9 Fax & Telephone machine Unit 1 1,300.00 1,300.00
10 Carpet and Curtain LS 1 23,000.00
Total 101,800.00
Working Capital
Operating Expenses
SN List of Items Annual cost in birr Assumptions Used

1 Audit and legal fee 48,000.00 4000 br/per ,month
2 Stationery supplies 12,000.00 1000 br/month
3 Promotional Cost 40,000.00 Lump sum annual cost
4 Property Insurance 84,009.00 1% of the building
5 Cleaning Supplies 12,000.00 1000 br. Per month
6 Uniforms 12,000.00
7 Water consumption 5,000.00 2500 m3 by 3.15 br
8 Electric consumption 130,000.00 100,000KWH By Br.1.30
9 Fuel 38,000.00 2000 lit per year by Br.19
11 Telephone & fax 20,000.00 1800 per month
12 Repair expense 72,018.00 2% of building cost
13 Miscellaneous costs 40,000.00 6000 per month
Total 513,027.00
Pre-service Expenses
SN Description Cost in birr
1 Project proposal 100,000.00
31
2 Licensing fee and others

Total 100,000.00
Summary of Total initial investment cost
SN Description Cost in Birr Percentage Share

1 Land, building & construction 27,745,598 80.39%
2 Building machines & Equipments 1,299,800.00 3.77%
3 Vehicle 300,000.00 1%
4 Office Equipment 101,800.00 0.29%
5 Total fixed investment cost 29,447,198.00 85.32%
6 Salary expense 1,238,400.00 3.59%
7 Operation Expense 513,027.00 1.49%
8 Pre service Expense 100,000.00 0.29%
9 Total Working capital 731,836.00 2.12%
10 Sub total 4,604,532.00 7.49%
11 Contingency (10%) 460,453.20
Total initial investment capital 34,512,183.20
32
6 Financial analysis
The financial analysis of this mixed use project is based on the data presented in the previous
chapters and the following assumptions: -
Finishing period 2 years

Source of finance 30 % equity
Debt finance 70 % loan
Bank interest 13%
Discount cash flow 10%
Accounts receivable 30 days
Raw material (perishable) 3 days
Raw Material (non perishable) 30 days
Cash in hand 5 days
Accounts payable 30 days
Repair and maintenance 5% of equipment cost
6.1 Repair and Maintenance Cost
The annual repair and maintenance cost of the plant is estimated based on the following rates.
Table 8: Repair and Maintenance Cost

Item Rate
Machinery and equipment 5% of the total cost or Book value
Building and civil works 2% of the total cost or Book value
Utilities 5% of the total cost or Book value
6.2 Depreciation and Amortization
The following depreciation rates are applied to depreciate the assets of the project:
 Buildings and associated Civil works 5%, linear to scrap Value

 Machinery and Equipment’s 10%, linear to scrap Value
33
6.3 Total Revenue
Based on the projected profit and loss statement, the project will generate a profit throughout
its operation life. Annual net profit after tax increases from Birr 8,810,480 at the beginning of
the project to Birr 22,502,429 during the last year of operation year. The detail is presented in
Annex.
6.4 Discounted Payback Period
The payback period, also called pay–off period is defined as the period required recovering the
original investment outlay through the accumulated net cash flows earned by the project.
Accordingly, based on the projected cash flow it is estimated that the project’s initial
investment will be fully recovered within 3 year 9 months.
6.5 Cash flow
The projected cash flow of the envisaged project shows that the project would generate
positive net cash flows throughout the operation years. Cumulative cash flow generated by the
project towards the end of the first operation year will amount to Birr 9,259,139. At the end of
the project life, this amount will rise to Birr 23,618,548. The detail is presented in Annex.
6.6 Benefit cost ratio
The BCR is defined as the ratio of the sum of the project’s discounted benefits to the sum of its
discounted investment and operating costs.
When BCR > 1, accept the project
When BCR < 1, reject the project
When BCR = 1, be indifferent
34
Bt n
 (1  r ) t
t 0
BCR  n
C
 (1  tr ) t
t 0
BCR is 5 and positive this indicates this project would return 5 birr in benefits for each birr
spent.
6.7 Internal Rate of Return
The internal rate of return (IRR) is an indicator of the efficiency or quality of an investment. A
project is a good investment proposition if its IRR is greater than the rate of return that could be
earned by alternate investments or putting the money in a bank account. Accordingly, the IRR of
the project after tax is computed to be 34.13% indicating the viability of the project.
6.8 Net present value
Net present value (NPV) is defined as the total present (discounted) value of a time series of
cash flows. NPV aggregates cash flows that occur during different periods of time during the
life of a project into a common measuring unit i.e. present value. It is a standard method for
using the time value of money to asses’ long-term projects. NPV is an indicator of how much
value an investment or project adds to the capital invested. In principle a project is accepted if
the NPV is non-negative. Accordingly, the net present value of the project at 10% discount rate
is found to be Birr 54,439,417 which is acceptable.
35
7 Conclusions and Recommendations
Conclusion
The objective of this proposed feasibility study is primarily to facilitate the entrepreneur with
investment information and provide an overview of the project. The proposed feasibility may
form the basis of an important investment decision and in order to serve this objective, the
document covers various aspects of Concept Development, Start-up, Production, Marketing,
Finance, and Business Management.
The feasibility is based on the information obtained from various agricultural sources as well as
discussions with businessmen. For financial model, since the forecast/projections relate to the
future periods, actual results are likely to differ because of the events and circumstances that
don’t occur frequently as expected.
Whilst due care and attention has been taken in performing the exercise, no liability can be
inferred for any inaccuracy or omissions reported from the results thereof. It is essential that our
report is read in its entirety with the financial model in order to fully comprehend the impact of
key assumptions on the range of values determined.
The project is accessible and has the necessary infrastructure such as road, telephone, water, and
electric power. The proposed project clearly identifies all the necessary equipment, inputs,
management of the company and the required manpower. The highest authority in the project
will be vested in the hand of the owner. He will control the overall activities of the proposed
project. Demand projection divulges that there is high demand for feed production in the country.
Accordingly, the planned project is set to provide quality products in the area.
The proposed project possesses a wide range of economic and social benefits such as increasing
the level of investment, tax revenue and employment creation for both women and youths. It will
have also environmental concerns to protect it by planting trees around its working area and by
utilizing environmental friendly raw materials. Generally, the project is technically feasible,
financially and commercially viable as well as socially and economically acceptable. Hence the
project is worth implementing.
36
Recommendations
Financial sensitivity analysis shows that the project is highly sensitive to a decrease in sales
revenue but relatively less sensitive to an increase in raw material and investment costs.
Therefore, it is recommended that the company should give great attention to the possible
reasons for sales reduction. In this case, different mechanisms should be selected and
implemented to increase sales. In addition to this, the company should decrease its cost that
lowers profitability. The project must utilize modern promotional styles to capture the planned
market share. To do so, it has to design an effective strategy to achieve this plan.
Although due care and diligence have been taken to compile this document, the contained
information may vary due to any change in any of the concerned factors, and the actual results
may differ substantially from the presented information. In this case, any delaying to implement
the project creates some problem on its profitability as there is always change like change in the
price of services and goods, cost of raw materials, customers preference and purchasing power,
etc.….So, it is recommended that investors should implement the project as soon as possible
before any change occurred.
37
References
Chandra, P; 2006.Projects Planning, Analysis, Selection, Financing, Implementation, and

Review, six edition. Tata McGraw-Hill publishing company Limited, New Delhi.
Eyob Deraro (2013) Project Proposal for the construction of Mixed use Building.
Wikipedia: The Free Encyclopedia. Retrieved December 10, 2006 from the World Wide Web
www.wikipedia.org.
38
Annex 1. Sales Revenue

Description Project year
1 2 3 4 5 6 7 8 9 10
Ground floor Rent 11,180,40 16,369,22
9,240,000 10,164,000 0 12,298,440 13,528,284 14,881,112 4 18,006,146 19,806,761 21,787,437
Size
1110 1110 1110 1110 1110 1110 1110 1110 1110 1110
unit price
350 385 424 466 512 564 620 682 750 825
Rent for shop and office 1-3 floor
2,956,800 3,252,480 3,577,728 3,935,501 4,329,051 4,761,956 5,238,152 5,761,967 6,338,163 6,971,980
Size
1110 1110 1110 1110 1110 1110 1110 1110 1110 1110
unit price
224 246 271 298 328 361 397 437 480 528
Rent for shop and office 4-7 floor
2,890,800 3,179,880 3,497,868 3,847,655 4,232,420 4,655,662 5,121,229 5,633,351 6,196,687 6,816,355
Size
1110 1110 1110 1110 1110 1110 1110 1110 1110 1110
unit price
219 241 265 291 321 353 388 427 469 516
Rent for shop and office 8-12 floor 1,980,000 2,217,600 2,439,360 2,439,360 2,683,296 2,683,296 2,951,625 2,951,625 3,246,787 3,246,787
Size 1110 1110 1110 1110 1110 1110 1110 1110 1110 1110
unit price 150 165 182 200 220 242 266 292 322 354
Parking 91,250 100,375 110,413 121,454 133,599 146,959 161,655 177,820 195,602 215,163
Size
1110 1110 1110 1110 1110 1110 1110 1110 1110 1110
unit price
5 5.50 6.05 6.66 7.32 8.05 8.86 9.74 10.72 11.79
Total Sale 20,805,76 29,841,88
17,158,850 18,914,335 9 22,642,409 24,906,650 27,128,986 4 32,530,910 35,784,000 39,037,721
Annex 2. operating cost
39
Operating years of the project

Description 1 2 3 4 5 6 7 8 9 10
A. Direct cost

Raw Material
538,67 623,58 654,76 687,50 721,88 757,97 795,87
Cost
513,027 8 565,612 593,893 8 7 5 1 5 3
Sub-total
Total Direct
cost
B. Indirect cost
 Wages and 1,238,400 1,300,320 1,365,33 1,433,60 1,505,28 1,580,547 1,659,57 1,742,553 1,829,681 1,921,165
Salary 6 3 3 4
 Repair and 667,449.00 667,450.00 667,451.00 667,452.00 667,453.00 667,454.00 667,455.00 667,456.00 667,457.00 667,458.00
Maintenance
 Property 4,275. 4,275 4,275.0 4,275. 4,275 4,275 4,275 4,275 4,275 4,275
Insurance 00 .00 0 00 .00 .00 .00 .00 .00 .00
 Utility 1,188,000 1,247,400 1,309,770 1,375,259 1,444,021 1,516,222 1,592,034 1,671,635 1,755,217 1,842,978
 Land lease 422,640 422,641 422,642 422,643 422,644 422,645 422,646 422,647 422,648 422,649
 Advertising 50,000. 50,001 50,002.0 50,003. 50,004 50,005 50,006 50,007 50,008 50,009
and Promotion 00 .00 0 00 .00 .00 .00 .00 .00 .00
 40,000. 40,001 40,002.0 40,003. 44,003 48,403 53,243 58,568 64,425 70,867
Miscellaneous 00 .00 0 00 .30 .63 .99 .39 .23 .75
Expense
Total operating 4,123,791 4,270,766 4,425,090 4,587,130 4,761,271 4,944,319 5,136,739 5,339,022 5,551,686 5,775,275
cost

40
Annex.3 income statement
Operating years of the project

Description 1 2 3 4 5 6 7 8 9 10
Sales
Revenue 17,158,850 18,914,335 20,805,769 22,642,409 24,906,650 27,128,986 29,841,884 32,530,910 35,784,000 39,037,721
Less: 4,123,791 4,270,766 4,425,090 4,587,130 4,761,271 4,944,319 5,136,739 5,339,022 5,551,686 5,775,275
Operating
cost
Income 13,035,059 14,643,569 16,380,679 18,055,279 20,145,379 22,184,667 24,705,145 27,191,888 30,232,314 33,262,446
before
Depreciation
and interest
Less: interest 448,658.00 448,658.00 448,658.00 448,658.00 448,659.00 448,660.00 448,661.00 448,662.00 448,663.00 448663
Income 12,586,401 14,194,911 15,932,021 17,606,621 19,696,720 21,736,007 24,256,484 26,743,226 29,783,651 32,813,783
before
Depreciation
Less: 0.00 0.00 667,449 667,450 667,451 667,452 667,453 667,454 667,455 667,455
Depreciation
Profit /Loss 12,586,401 14,194,911 15,264,572.00 16,939,171.00 19,029,269.00 21,068,555.00 23,589,031.00 26,075,772.00 29,116,196.00 32,146,328.00
Before Tax
Less: Tax 3,775,920.30 4,258,473.30 4,579,371.60 5,081,751.30 5,708,780.70 6,320,566.50 7,076,709.30 7,822,731.60 8,734,858.80 9,643,898.40
(30%)
Net Profit or 8,810,480.70 9,936,437.70 10,685,200.40 11,857,419.70 13,320,488.30 14,747,988.50 16,512,321.70 18,253,040.40 20,381,337.20 22,502,429.60
Loss After
Tax
41
Annex. 4 loan disturbance
Installment Periods (in years )

Item 0 1 2 3 4 5 6 7 8 9 10
Loan disbursed
24,158,528
Principal 3,451,218 3,451,218 3,451,218 3,451,218 3,451,218 3,451,218 3,451,218
24,158,528
Interest (13%) 4,486,583 448,658 448,658 448,658 448,658 448,658 448,658 448,658 448,658 448,658 448,658
Total 28,645,111 448,658.00 448,658.00 448,658.00 3,899,876.00 3,899,876 3,899,876 3,899,876 3,899,876 3,899,876 3,899,876
Outstanding
Balance
42
Annex. 5 Man power
SN Position No Qualification Monthly salary Annual salary

in Birr in Birr
1 General manager 1 BA in management 10,000 120,000
2 Building admin 1 BA in Acct/Mgt 8,000 96,000
3 Secretary 1 10+2 in secretariat science 3,000 36,000
4 HRM Officer 1 10+2 in HRM/Management 4,000 48,000
5 Technical and maintenance manager 1 Diploma in building maintenance 8,000 96,000
6 Finance head 1 BA in Accounting 6,000 72,000
7 IT Technician 1 Diploma in computer science/IT 6,000 72,000
8 Marketer 1 Diploma in marketing 5,000 60,000
9 Accountant 1 Diploma in accounting 4,000 48,000
10 Guards/Security 4 Basic 2,500 30,000
11 General Service head 1 Diploma in Management 6,000 72,000
12 Purchaser 1 Diploma in purchasing &Sup Mgt 3,500 42,000
13 Electrician 1 10+2 in general electricity 4,000 48,000
14 Plumber 1 10+2 in general mechanic 3,500 42,000
15 Casher 1 10+1 in bookkeeping 3,500 42,000
16 Cleaner 5 Unskilled 3,000 36,000
17 Maintenance officer 1 10+2 in General mechanic 3,500 42,000
18 Driver 1 10 completed 2,500 30,000
Total 25 86,000 1,032,000
Benefit (20%) 17,200 206,400
Grand Total 103,200 1,238,400
43
Annex 6. discounted cash flow

Investment
Project Life years
Year
Description
0 1 2 3 4 5 6 7 8 9 10
INFLOW

Net sales
revenue 0
17,158,850 18,914,335 20,805,769 22,642,409 24,906,650 27,128,986 29,841,884 32,530,910 35,784,000 39,037,721
TOTAL
INFLOWS 0
17,158,850 18,914,335 20,805,769 22,642,409 24,906,650 27,128,986 29,841,884 32,530,910 35,784,000 39,037,721
OUTFLOWS

Investment
cost
34,512,18 - - - - - - - -
3 - -
Operating cost 5,136,73
0 4,123,791 4,270,766 4,425,090 4,587,130 4,761,271 4,944,319 5,339,022 5,551,686 5,775,275
9
Income tax
0 3,775,920 4,258,473 4,579,371 5,081,751 5,708,780 6,320,566 7,076,709 7,822,731 8,734,858 9,643,898
TOTAL
OUTFLOWS 8,529,23 12,213,4 13,161,75 14,286,54
34,512,183 7,899,711 9,004,461 9,668,881 10,470,051 11,264,885 15,419,173
9 48 3 4
NET CASH 10,385,096.0 17,628,436. 19,369,157.0 21,497,456.0

FLOW 10,850,695.00 9,259,139.00 11,801,308.00 12,973,528.00 14,436,599.00 15,864,101.00 23,618,548.00
0 00 0 0
NET PRESENT VALUE (NPV) 54,439,417.00
INTERNAL RATE OF RETURN (IRR) 34.13%
DISCOUNTED PAYBACK PERIOD (DPBP) 3.9years
44
Annex 7 undiscounted cash flow

Project Years
Investment
Description Operating years
Year
0 1 2 3 4 5 6 7 8 9 10
INFLFOWS
Inflow Funds
Own Equity
10,353,655
Long-term Loan 24,158,528 0 0
Inflow Operations
22,642,40
17,158,850 18,914,335 20,805,769 9 24,906,650 27,128,986 29,841,884 32,530,910 35,784,000 39,037,721
Sales revenue 22,642,40
0
17,158,850 18,914,335 20,805,769 9 24,906,650 27,128,986 29,841,884 32,530,910 35,784,000 39,037,721
TOTAL INFLOWS 22,642,40
34,512,183 17,158,850 18,914,335 20,805,769 9 24,906,650 27,128,986 29,841,884 32,530,910 35,784,000 39,037,721
OUTFLOWS
Investment cost
34,512,183 0 0 0 0 0 0 0 0 0 0
Operating cost 4,270,76 5,136,73
0 4,123,791 4,425,090 4,587,130 4,761,271 4,944,319 5,339,022 551,686 5,775,275
6 9
Financing Cost
· 3,451,218 3,451,218 3,451,218 3,451,218 3,451,218 3,451,218 3,451,218
0 0 0 0
Principal
·Interest 0
448,65 448,65 448,658 448,65 448,65 448,658 448,658 448,658 448,658 448,658
8 8 8 8
Income Tax 0
3,775,92
4,258,473 4,579,371 5,081,751 5,708,780 6,320,566 7,076,709 7,822,731 8,734,858 9,643,898
0
TOTAL
OUTFLOWS 34,512,183 8,348,369 8,977,897 9,453,119 13,568,757 14,369,927 15,164,761 16,113,324 17,061,629 13,186,420 19,319,049
45
NET CASH FLOW

0 8,810,481 9,936,438 11,352,650 9,073,652 10,536,723 11,964,225 13,728,560 15,469,281 22,597,580 19,718,672
BEGINNING
CASH BALANCE 0 0 8,810,481 18,746,919 30,099,569 39,173,221 49,709,944 61,674,169 75,402,729 90,872,010 113,469,590
ENDING CASH
BALANCE 0 8,810,481 18,746,919 30,099,569 39,173,221 49,709,944 61,674,169 75,402,729 90,872,010 113,469,590 133,188,262
Annex. 8 Civil works
No Description
Total price
A. SUB-STRACTURE
1 excavation and earth works 279,570.67
2 concrete work 1,936,546.34
Sub total 2,216,117.01
B. SUPER STRACTURE
1 Concrete work 7,753,358.45
2 Block work 551,534.40
3 Roofing 171,108.00
4 Carpentry and joinery
323,760.00
5 Metal works 820,860.00
6 Finishing 3,111,379.44
7 Painting 275,798.88
8 Electrical installation 7,236,330.00
9 Sanitary installation 1,151,022.00
Subtotal 21,395,151.17
A+B 23,611,268.18
Vat (15%) 3,541,690.23
Grand total
27,152,958.40
46

Project Title Feasibility Study For Frui

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Project Feasibility Study for the Establishment of Fruit and vegetable Production

PROJECT TITLE: - FEASIBLITY STUDY FOR FRUITS AND

PROJECT OWNER:- A Trading PLC.

PROJECT MANAGER:- Mr. Wasyhun Belay

ADDRESS: - AMHARA REGION, SOUTH, WELO, KALO

PROJECT AREA:- AMHARA REGION, SOUTH, WELO, KALO

DATE: June, 2019G.C

Table 3: land utilization Plan ………………………………………….……….…..16

Table 6: Manpower Requirement and Annual Labor Cost………………………22

Table 7: project Implementation schedule………………………………………. 23

Table 8: Repair and Maintenance Cost ……………………………………………3

PROJECT OWNER IAM Trading PLC

PROJECT TITLE Fruits and Vegetables production

LAND REQUIREMENT 100,000 M2

MARKET Domestic and International

COST OF THE PROJECT

PROJECT LIFE 10 YEARS

NUMBER OF WORKING DAYS 365 DAYS

FINANCIAL VIABILITY ( AT 10% DISCOUNT RATE )

NPV (NET PRESENT VALUE) 54,439,417 BIRR

IRR (INTERNAL RATE OF RETURN) 34.13%

PBP ( PAY BACK PERIOD) 3 year and 9 months

THE PROJECT IS TECHNICALLY FEASIBLE, FINANCIALLY AND COMMERCIALLY VIABLE

2.1 General Background

Ethiopia has a comparative advantage in a number of horticultural commodities due to its

2.1 General Objective

2.1.1 Specific objective

2.3 Project description

2.4 Project Rationale

Agriculture is the cornerstone of the development policy of the Government of Ethiopia.

2.5 The significance of the project

2.6 Project Location

3 The market Study

3.1 Market Analysis

3.2 The Demand-Supply Gap

2009 2010 2011

3.4 Future market or Demand of fruits and vegetables

3.5 Target customers

The target customers of this envisaged project include:-

 The surrounding community

3.6 Marketing promotion and strategy

3.8 The project facilities and Services plan

Feature of the sector

Ethiopia is potentially a wealthy country, endowed with abundant resource conducive to

Past and Present intervention

Justification of the project

Looking at the agro-climatic condition i.e. average temperature, rainfall, physic-chemical

Support for the project

4.1 Description of the project product

4.1.1 Land Use Plan

Table 3: land utilization Plan

4.2 Construction work and Technology

4.2.1 Construction schedule

4.2.2 Architectural Design & Layout

4.2.3 Structural design

4.2.4 Reinforced concrete

4.2.5 Foundation Design

4.2.6 Construction Plan and process

No Description Qty. Unit cost Cost (Birr)

5 Engineering and civil works

5.1 Land, Building and Civil Works

Table 5: List of Building and Civil Works and Their Costs

5.2 Manpower and training requirement