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 3,427,840
Initial Investment (12,500,000)
Initial Funding Amount Debt amount raised / (repaid) 6,250,000
At the end of 5 years deposit
Debt Raised 6,250,000 amount would be returned
Equity Raised 6,250,000 Total Cash Flows (6,250,000) 3,427,840
IRR

Inter

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

32,412,600 35,653,860 39,219,246 43,141,171
10% 10% 10% 10%
9,000,000 9,000,000 9,000,000 9,000,000
6,000,000 6,000,000 6,000,000 6,000,000
4,356,000 4,791,600 5,270,760 5,797,836

4,861,890 5,348,079 5,882,887 6,471,176

8,194,710 10,514,181 13,065,599 15,872,159
812,500 812,500 812,500 812,500

7,382,210 9,701,681 12,253,099 15,059,659

2,583,774 3,395,588 4,288,585 5,270,881
4,798,437 6,306,093 7,964,514 9,788,778
 2 3 4 5
Year - 2 Year - 3 Year - 4 Year - 5
4,798,437 6,306,093 7,964,514 9,788,778

(6,250,000)
7,500,000

4,798,437 6,306,093 7,964,514 11,038,778

Interest Rate %
1% 2% 3%