Set up a car showroom

Requirements Estimate Of Business

Number of Units
Models Price
Showroom 5,000 sqft Sold / month
Go Down 10,000 sqft Prado 1 10,000,000
Initial Costs Fortuner 5 3,200,000
Initial Rennovation 5,000,000 Rs. Camry 1 4,000,000
Deposit for Showroom (6
months rental) 4,500,000 Rs. Corollaa 3 2,200,000
Deposit for Go Down (6
Months Rental) 3,000,000 Rs. Innova 8 3,000,000
Rental Costs 12,500,000 Etios 15 900,000
Rent for Showroom 150 Rs./Sqft/Month Total Monthly Sales 33
Rent for Go Down 50 Rs./Sqft/Month
Staff Profit Calculations
Staff No. Salaries Year - 1
manager 1 75,000 Rs./Month Revenues 29,466,000
Sales 3 45,000 Rs./Month y/y (%) growth
Admin 2 30,000 Rs./Month Rental - Showroom 9,000,000
Go Down 3 20,000 Rs./Month Rental - Go Down 6,000,000
Increament in Salaries 10% per year Salaries 3,960,000
Operations & Operations and Maintenance
Maintainance 15% As % of Revenues Expenses 4,419,900
Initial Funding Operating profit 6,086,100
Debt - For 5 years 50% Interest Expense 812,500
Interest Rate -
Commercial Loan 13% per year Profit Before Tax 5,273,600
Equity 50% Tax @ 35% 1,845,760
Net Profit 3,427,840
 Evaluate the proposal to run this business for 5 years by Cash Flow Calculations 1
investing 50% in the business Year- 0 Year - 1
Operating Cash Flows/Net Profit
Initial Investment
Initial Funding Amount Debt amount raised / (repaid)
At the end of 5 years deposit
Debt Raised 6,250,000 amount would be returned
Equity Raised 6,250,000 Total Cash Flows
IRR

Inter
10%
20%
25%
30%
35%

Debt %
40%
45%
50%
55%
60%
Commission Commission
(%) (Rs.)
4% 400,000
4% 640,000
4% 160,000

3% 198,000

3% 720,000
3% 337,500
2,455,500

Year - 2 Year - 3 Year - 4 Year - 5

10% 10% 10% 10%

 2 3 4 5
Year - 2 Year - 3 Year - 4 Year - 5

Interest Rate %
11% 12% 13% 14%