PRINCIPLES OF FINANCE + LAB

Individual Final Project

Submission: Latest by Wednesday / 15 December 2021

Project Description:

Our university is having “Business Week” event next week. As a student from Faculty of
Economics & Business, you are required to participate on this event by renting a stand and sell
Food & Beverage (F&B) products to promote your “Hospitality Management” concentration.

This event will be held for 2 weeks (14 days) at Lippo Plaza Medan. During these two weeks,
there will be daily student activities or performances to entertain visitors, while the main / grand
student activities or performances will be on the last day (Day 14).

The rent cost for one stand is IDR 2 million for those two weeks. This includes the standard
utilities facilitated by Lippo Plaza Medan.

Requirements:

You are required to provide the following before carrying out analysis:
- Describe the nature of the F&B business that you have in mind.
- Calculate the detailed total costs required to make this happen (initial outlay).
- Explain how you are going to raise capital to support this activity.
- Evaluate and assess the business basing on the daily and weekly returns.
- Show detailed daily cash flows (revenues and expenses) for the first week.
- Provide detailed daily estimations of cash flows for the first week – list the cash inflows
and cash outflows for each day (Day 1 - 7).

Examples of cash inflows are: sales revenue, loan, investment from your own savings, etc.
Examples of cash outflows are: rental expense, salary expenses, transportation, etc.

Determine the net daily cash flow (receipts minus expenses). Do not include depreciations
in expenses.

- For the subsequent week, detailed estimations of the daily cash flows for the business
are not required. You need to estimate net weekly cash inflows and net weekly cash
outflows. Determine the net weekly cash flows (net weekly cash inflows – net weekly cash
outflows).
- You do not need to prepare Income Statement and Balance Sheet.
Submit a report covering the following sections:

 UPH Final Exam/Project cover sheet

 Content page.

 Description of the selected F&B product(s) and the reason behind: minimum 300 words.
(10 marks)

 Raising capital: Explain how you will raise enough capital to support the two-week long
business. Provide the reason, advantages, and disadvantages for the decision – Minimum
300 words (10 marks)

 For week one, estimate detailed daily cash flows for the business.
List all items of receipts and expenses for each day (Day 1 - 7) and net daily cash flow
in the following table. Do not include depreciations in expenses.
Determine week 1 net cash flow for the business. (30 marks)

BUSINESS 0 1 2 3 4 5 6 7
Cash inflows
- Revenue
- Others

Cash outflows
- Salaries exp
-……..
-……..

Net cash flows

 Estimation of daily cash flows for the following week.

Detail estimations of the daily cash flows for subsequent week are not required. Just estimate
net daily cash inflows and net daily cash outflows. Determine net daily cash flows (net cash
inflows minus net cash outflows). Enter daily cash flow (CF) in the following table.
(10 marks)
 Week 1 2 3 4 5 6 7 Net Weekly CF
0 Net Cash inflow

Net Cash outflow

1 Net Cash inflow

Net Cash outflow

2 Net Cash inflow

Net Cash outflow

 Estimation of weekly cash flows for the following week.

Enter net weekly cash inflows, net weekly cash outflows and net cash flows in the following
table.
(10 marks)

End of Week

0 1 2
Net cash inflows

Net cash outflows

Net cash flows

 Analyse the business with Net Present Value.

Determine Payback Period (without discounting) for the business. Show details of the
workings.
Explain shortcomings of Payback Period. Suggest ways to overcome the shortcomings.
(20 marks)

 Conclusion – Summarize, identify, and explain whether the selected F&B stand business
worth the investment, despite the size.

 Overall format, Details, References, Appendices – 10 marks