AMERICAN INTERNATIONAL UNIVERSITY-BANGLADESH Faculty of Business Administration BBA-3218 [G] Department of Operations Management

RESEARCH PROJECT REPORT

Assignment FT # 3

RESEARCH REPORT
(Refer to text book pages 599-612) Due: May 5th, 2010

RESEARCH TITLE: GROUP NAME: SL: 17 ID: 09-13544-1 SL: 39 ID: 09-12933-1 SL: 3 ID: 09-13239-1 SL: 22 ID: 09-13356-1 Name: Hossain, SK. MD. Naeem Name: Ahmed, MD. Salahuddin Name: Sikder Md . Touhidduzaman Name: Karmaker, Debashish

Table of Contents
1. Summary................................................................................................................... 2 1.Objective: ............................................................................................................2 2.Results: Customers face a hug e impact of tax in developing or buying their apartments from concord real estate. And customers show their reluctance to deal or buy apartment from real estate because of increased amount of tax payment. ................................................................................................................................2 3.Conclusion: Real estate deals with the corporate world and concord is a wellestablished company in corporate world. So taking a vast amount of debt in their capital structure is obvious. And the main variable for the tax impact is the debt. And this debt can both increase or decrease the tax amount of the customers. ...2 4.Recommendations: When an organization takes debt from banks or somewhere else it pays interest rate for debt taken from the banks. And the organization gets a tax benefit from the interest rate paid to the bank. So it is recommended to the organization to make their capital structure equal (50% of Debt & 50% of Equity) so that it can get a tax shield which may help organization’s customers to pay a reduced amount of tax............................................................................................2 2. Research Details........................................................................................................ 3 5.Introduction..........................................................................................................3 6.Methodology: We have prepared our research survey following questionnaire methods. We made 20 samples of the questionnaire and asked the customers questions distributing the questionnaire sample.....................................................3 7.Result....................................................................................................................4 7.1.4.Limitations: we had some limitation while conducting the research. And the limitation we faced are:...........................................................................................8 8.Conclusions & Recommendations:........................................................................8 ............................................................................................................ 9

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AMERICAN INTERNATIONAL UNIVERSITY-BANGLADESH Faculty of Business Administration BBA-3218 [G] Department of Operations Management
RESEARCH PROJECT REPORT

Assignment FT # 3

4. Appendix.................................................................................................................. 10 9.Data Collection Form (questionnaire).................................................................10 10.General Tables (additional)...............................................................................10 11.General Charts (additional)...............................................................................10 12.General Comments (additional)........................................................................10 13.Bibliography (if any).........................................................................................10 14.Other Supporting Materials (if any)...................................................................10

1. Summary 1. Objective:
 To find out the tax impact faced by the customer of concord real estate.  To find out the way to reduce the tax amount of the customers.

2. Results: Customers face a hug

e impact of tax in developing or buying their apartments from concord real estate. And customers show their reluctance to deal or buy apartment from real estate because of increased amount of tax payment.

3. Conclusion: Real estate deals with the corporate world and concord is a wellestablished company in corporate world. So taking a vast amount of debt in their capital structure is obvious. And the main variable for the tax impact is the debt. And this debt can both increase or decrease the tax amount of the customers.

4. Recommendations: When an organization takes debt from banks or somewhere else
it pays interest rate for debt taken from the banks. And the organization gets a tax benefit from the interest rate paid to the bank. So it is recommended to the organization to make their capital structure equal (50% of Debt & 50% of Equity) so that it can get a tax shield which may help organization’s customers to pay a reduced amount of tax.

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AMERICAN INTERNATIONAL UNIVERSITY-BANGLADESH Faculty of Business Administration BBA-3218 [G] Department of Operations Management
RESEARCH PROJECT REPORT

Assignment FT # 3

2. Research Details 5. Introduction
5.1.1. Background: This research has been conducted based on accounting & finance. We have conducted this research under the background of tax impact faced by the customers of Concord Real-estate

5.1.2. Objectives: Broad objective: To find out the tax impact faced by the customer of concord real estate. Specified objective: To find out the way to reduce the tax amount of the customers.

6. Methodology: We have prepared our research survey following questionnaire
methods. We made 20 samples of the questionnaire and asked the customers questions distributing the questionnaire sample.

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AMERICAN INTERNATIONAL UNIVERSITY-BANGLADESH Faculty of Business Administration BBA-3218 [G] Department of Operations Management
RESEARCH PROJECT REPORT

Assignment FT # 3

7. Result
7.1.1. Area 1: The importance given on the following topics by the customers for the tax payment : 7.1.1.1. Table:
very important importantnot too 1 2 1 6 8

important

Govt. declared fiscal policy Cost of debt Cost of equity Interest rate paid for taking debt organization's percentage of leverage

11 6 7 6 5

8 12 12 8 7

7.1.1.2.

Bar Chart

7.1.1.3. Interpretation : Here the result shows that customer considered government declared fiscal policy very important for their tax payment & considered organization percentage of leverage not too important as a variable for tax. Spring 2010-11 4 of 10

TOTAL 20 20 20 20 20

AMERICAN INTERNATIONAL UNIVERSITY-BANGLADESH Faculty of Business Administration BBA-3218 [G] Department of Operations Management
RESEARCH PROJECT REPORT

Assignment FT # 3

7.1.2. Area 2: The extent in which the customers have agreed on the following topics that have made an impact on their tax payment: 7.1.2.1. Table:
Frequency table Strongly Agree DisgreeStrongly 0 1 2 0 0 1

Disagree

Nuetral

Weighted average cost of capital Selection of an all equity firm Agency cost occurred between creditors and managers Agency cost occurred between shareholders and managers Increased amount of discount rate Debt covenent

7 7 4 2 9 8

8 9 5 9 7 7

4 0 6 5 2 2

1 3 3 4 2 2

Percentage table Strongly Agree DisgreeStrongly

Disagree

Nuetral

Weighted average cost of capital Selection of an all equity firm Agency cost occurred between creditors and managers Agency cost occurred between shareholders and managers Increased amount of discount rate Debt covenent

35 % 35 % 20 % 10 % 45 % 40 %

40 % 45 % 25 % 45 % 35 % 35 %

20 % 0% 30 % 25 % 10 % 10 %

5% 15 % 15 % 20 % 10 % 10 %

0% 5% 10 % 0% 0% 5%

100 % 100 % 100 % 100 % 100 % 100 %

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TOTAL

Agree

TOTAL 20 20 20 20 20 20

Agree

AMERICAN INTERNATIONAL UNIVERSITY-BANGLADESH Faculty of Business Administration BBA-3218 [G] Department of Operations Management
RESEARCH PROJECT REPORT

Assignment FT # 3

7.1.2.2.

Line Chart

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AMERICAN INTERNATIONAL UNIVERSITY-BANGLADESH Faculty of Business Administration BBA-3218 [G] Department of Operations Management
RESEARCH PROJECT REPORT

Assignment FT # 3

7.1.2.3. Interpretation: By doing the survey we have found out that the debt covenant has the major impact on the tax as shown on the table. 40% of the people strongly agreed that it can change the tax rate. On the other hand agency cost doesn’t have any impact in the change of tax rate.

3.
7.1.3. Area 3: The parts of the organization that the customers consider most important regarding tax impact. 7.1.3.1. Table:
Organization's parts

overall capital structure

cost of capital

Discount rate 1 5%

equity

debt

In amount In percentage

1 5%

6 30%

10 50%

2 10%

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Total 20 100%

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AMERICAN INTERNATIONAL UNIVERSITY-BANGLADESH Faculty of Business Administration BBA-3218 [G] Department of Operations Management
RESEARCH PROJECT REPORT

Assignment FT # 3

7.1.3.2.

Pie Chart :

7.1.3.3. Interpretation: Here we can interpret that customers ruminate overall capital structure the most important part of the organization & they said it can really make their tax payment vary.

7.1.4. Limitations: we had some limitation while conducting the research. And the limitation we faced are:  We did not get enough time to make this research  We had to make the people understand about the techniques for tax calculations we used in this research.

8. Conclusions & Recommendations:
Concord is a well established real estate company and every year it makes a handsome amount of revenue. And to continue of earning this revenue it takes or borrows debt in their capital structure which really makes a tax impact for the customers. As it is rational that customers don’t want to pay a large amount of tax so they prefer their tax amount to be reduced. So it is recommended for the organization to follow the procedures to make the customers tax payment reduced.And the organization can do it by taking amount of debt equalizing the amount of equity. Spring 2010-11 8 of 10

AMERICAN INTERNATIONAL UNIVERSITY-BANGLADESH Faculty of Business Administration BBA-3218 [G] Department of Operations Management
RESEARCH PROJECT REPORT

Assignment FT # 3

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AMERICAN INTERNATIONAL UNIVERSITY-BANGLADESH Faculty of Business Administration BBA-3218 [G] Department of Operations Management
RESEARCH PROJECT REPORT

Assignment FT # 3

4. Appendix 9. Data Collection Form (questionnaire) 10. 11. 12. 13. 14.
General Tables (additional) General Charts (additional) General Comments (additional) Bibliography (if any) Other Supporting Materials (if any)

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