TABLE OF CONTENTS

TITLE PAGE

1. EXECUTIVES SUMMARY OF PROJECT...................................................................................................2

2. INTRODUCTION...........................................................................................................................................3
2.1. Background Information..........................................................................................................................3
2.1 Name of the Project.......................................................................................................................................4
2.2. Project Goals and Objectives...................................................................................................................4
3. KEY SUCCESS AND RISK FACTORS........................................................................................................3
3.1. Macro Success factors.............................................................................................................................3
Key Success Factors............................................................................................................................................3
3.2. Sector Success Factors.............................................................................................................................4
3.3. SWOT (In Matrix) Analysis of the Project..............................................................................................5
4. MARKET STUDY AND PRODUCTION PROGRAM..................................................................................6
4.1. Market Study...........................................................................................................................................6
4.1.1. Present Demand and Supply............................................................................................................6
4.1.2. Projected Demand............................................................................................................................7
4.1.3.Pricing and Distribution..................................................................................................................................7
4.2. Customers................................................................................................................................................7
4.2.1. Price Sensitivity...............................................................................................................................7
4.2.2. Customer Power..............................................................................................................................7
4.2.3. Suppliers..........................................................................................................................................8
4.2.4. Marketing Strategy..........................................................................................................................8
4.2.5. Target Market...............................................................................................................................8
4.2.6. Competition.....................................................................................................................................8
4.3. Production Program.................................................................................................................................9
4.3.1. Raw Materials and Utilities.............................................................................................................9
4.3.2. Availability and Source of Raw materials........................................................................................9
4.3.3. Electricity & Water (Utility) and Furniture Cost Determination....................................................10
4.4. Production Process................................................................................................................................10
4.4.1. Furniture and Equipment...............................................................................................................10

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5. HUMAN RESOURCE AND TRAINING REQUIREMENT........................................................................12
5.1. Human Resource....................................................................................................................................12
5.2. Training Requirement............................................................................................................................12
6. BALANCE SHEET PROJECTION & FINANCIAL ANALYSIS................................................................14
6.1. Financial Plan........................................................................................................................................14
6.2. Source of Fund......................................................................................................................................14
6.3. Expected Financial Results....................................................................................................................14
6.4. Profit/Loss Forecast...............................................................................................................................15
6.5. Cash Flow Forecast...............................................................................................................................15
6.6. The Payback Period of the Loan............................................................................................................15
7. SOCIO ECONOMIC BENEFIT....................................................................................................................18
8. CONCLUSIONS & RECOMMENDATIONS..............................................................................................19
8.1. Conclusion.............................................................................................................................................19
8.2. Recommendations.................................................................................................................................19

2
 1. EXECUTIVES SUMMARY OF PROJECT

The project envisages the establishment with 5 self contend bed rooms at Andenet Hotel in Afar
Region. And six (6) other expanded bed room for the next time after getting the loan from Commercial
bank of Ethiopia. Since there is hotel that accommodates the required services of local customers, the
demand for the service is very attractive.

The financial study shows that the total investment cost is birr7,079,620from the total investment
capital birr 187,000is to be financed by CBE for Furniture and equipment’s, Birr 1,553,090.3 for the
requirement of working capital and Birr5,339,530.07 already existing investment cost of the project.

With this investment the financial analysis result of the service indicates that, it will generate net profit
of Birr 394,156.72during its first year of operation and Birr 956,779.78 during its tenth year operation.
Also, the cash flow projection shows a positive growth in cash balance from Birr630,343.71of the first
year to Birr 9,526,240.54at the tenth year. This implies that the project will not face liquidity constraint
to finance its operational cost and serve its debt obligation.

Organizational structure of the project is designed to fit the general business operation and the
particular nature of the hotel service firm. Accordingly, the project is expected to create employment
opportunity for about more than 12 at the initial startup. The available labor for the vacant position is
the critical part of the analysis of organization and management of a certain project. In this regard, the
project is not expected to face trouble considering the universities and vocational schools and their
production of technical people year after year.

The project also has great contribution for socio economic development of the country by generating
additional income for the owner, creating permanent and temporary employment opportunity for
professional,semi-skilledand unskilled workers directly as well as indirectly. In addition, the project
plays crucial role in contribution of government income through profit tax. Moreover, the project has
no significant negative impact on the environment.

3
2. INTRODUCTION

2.1. Background Information

The background section may cover issues such as:

1. Name of the Client:-W/ro Zeweda Mekonen

Address: - Region: Afar Sub-City/Zone:
3 Town; - Awash Areba Town
Woreda: - Amebara
Kebele:01 House No: ------------------
Tel. No. _______ Office Res. _______________
Mobile: 09-12-10-55-16
Fax ______________ P.O. Box: ______
E-Mail: Web site ____ _______

2. The Project:-

2.1Name of the Project:-Andent Hotel.

2.2. Type of Project፡-Hotel Service

2.3. Address:-

Region:-Afar: - Sub-City/Zone; 3
Town:-Awash Areba Woreda: Amebara
Kebele :-01- House No: - ___-__
Tel. No.Office Res. _____________
Mobile:- 09-12-10-55-16
Fax ______-________ P.O. Box __________
E-Mail;-_________ Web site _________
3. Form of Organization:- Private limited Company

4
 2.2. Project Goals and Objectives

Andent Hotel service project has identified several goal and objectives for the business.

 Reach the point of sustainable profitability.

 Enjoy work while making a good life.
 To create jobs and entrepreneurship.
 To better the lives of members and their families and those of the community at large through
generation of income for household management.
 Empower the local community through participations in the firm and hearing them as experts
and labor employees.
 Have mutual relationships with entire community and others companies in order to own good
will and make reasonable profit.
 To combat poverty and hunger.

Mission 

Andent Hotel project mission is to become the leading provider the service with quality products to
and attracts the customer. The business philosophy of  the  company  is   to  offer  clients  something 
quick and  tasty  to   hydrate  them before  and  after  workouts  all  while supporting   their  
communities with  a   donation  to  a  worthy   cause.   

Vision

Andent Hotel project visions is to producing quality of products being competent and well reputed
Company in the local people.

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3. KEY SUCCESS AND RISK FACTORS

Risks

The following factors that could prove to be detrimental to their running of the food product if they are
not addressed successfully as well as the physical attributes of the food making project that do not
appeal to the target market that need to be taken into account are as follows:

3.1. Macro Success factors

These are the factors that are outside of the control of an operator of the industry, but are likely to have
significant impact on a business. The performance of the food industry is affected by the following key
sensitivities.

 Raw material pricing

 Production technology
 Final product demand

Key Success Factors

These are the factors within the control of the operator and which should be followed in order to be
successful.
 Availability, quality and prices of different flavor of food.
 Generic promotion of the nutritional advantages of food product.
 Automation of the industry: Increasing automation allows plant to optimize production and
reduce labor although this affects employment.
 Dedicated leaders and professional management.
Key Drivers

 Changes in life style

 Demographic changes
 Urbanization

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  Income growth: income growth, which affects the purchasing power of consumers, is one of
the most important factors that drive consumers to consume hotel service.

3.2. Sector Success Factors

 Continuous Production: Since there is competition with food producing after releasing and make
quality food in consumer it should be continuously produced unless otherwise there might be a
chance to shift to other food producing in order to get better flavor.
 Advertisement: Since there is competition there should be promotion and advertizing works in
order to enhance market share.
 Professionalism: Successful project background history tells us that they were following effective
and profession based management system.
 Multi brand name products: One factory should sell its food products with different brand name
in that way he can maximize the market share.

The opportunities of setting up a hotel business are therefore as follows:

 Increase the shelf-life of the food.
 Increase food security.
 Add variety to the diet.
 Improve nutrition and health.
 Add value to the preparing and generate increased income.
 Create employment opportunities in producing areas.

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 3.3. SWOT (In Matrix) Analysis of the Project

 Strength  Weaknesses

 New building offers possibilities to differentiate  Size of the hotel might turn into
from competitors weakness
 New buildings are preferred over elderly buildings  Concept is not new and does not
 Located in industrial area surrounded by stimulate market growth
international companies
 Closeness to highway increases comfort for
customers and suppliers
 Modern & big hotel with good price-performance
ratio
 Opportunities  Threats

 Industrial zone, houses international companies with  Stagnating or even decreasing

many potential customers demand
 Fairs offer current increase in utilization and  Bad economic conditions
possibilities to establish name in an international  High cost of capital in Ethiopia
environment  Switching from private traffic to
public transportation reduces
number of possible customers
 Strong &well established
competition

Product Description and Application

Andent hotel is one of the hotels which facilities’ food, drinks, bed rooms and other services are
provided in an efficient, cordial and pleasant manner and style. Operating hotel businesses, especially at
require cleanliness and neatness of services to be provided and efficiency, cordiality and good manner
on the part of hotel workers.

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4. MARKET STUDY AND PRODUCTION PROGRAM

4.1. Market Study

4.1.1. Present Demand and Supply

The Afar Region encompasses the major tourist attraction centers of the country. The major ones are
Afar in Hadare, in Awash towns. These tourist attraction sites are very important to Country growth
and need to give hotel service as a choice. A number of domestic and foreign tourists visit these sites
every day.

Afar in Hadare one of the most historic places for the attraction both domestic and local tourists which
are visited almost every day throughout the year. Of course, there are more tourists during the rainy
season when the volume of water at the fall reaches its highest point. At any rate, thousands of
tourists visit the fall every year. But there are no facilities at the site where tourists gather to watch/see
the fall.

Usually most tourists arrive at the water fall around 10-12 am in the morning when it is hot at the site.
While watching the cascading of the water in the fall, they need drinks, shelter from the hot sun and
sometime snack. But unfortunately there are no facilities to provide these services. If there were hotels
and restaurants, many tourists could have made overnight stay near the fall. They would have preferred
to watch the fall at sunset or sunrise. They could have wanted to hear the sound of the fall during the
night. They could have experienced what it feels during the night in rural Ethiopia where there are no
noises of urban life. In short, they could have preferred to stay near the fall watching its huge water
flow for sometime say a night, a day or more. But there is nothing there to make them stay. No hotel,
no restaurant, not even a shade, not even a food-stand. Not even an umbrella in other places, in other
countries, all sorts of tricks are made to make tourists stay longer and spend more. But not in Afar land
at the center of the town well known in eastern Ethiopia. At the fall, tourists stay only for about 15-30
minutes and then they leave. They leave soon because there is nothing to make them stay longer even
though they are attracted by the natural beauty of the fall. The sooner they leave the less they spend.

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 4.1.2. Projected Demand

Hotel service is one of the potential sectors of the country to generate income. Its contribution towards
export and GDP growth is increasing. For example in 1996 hotel service industry has contributed 1.2%
GDP growth the total economic growth of the country.

4.1.3. Pricing and Distribution

Pricing of a hotel and restaurant services could be classified into three main categories i.e. food,
beverage and bed rent. In this regard the daily average price by category of service is given in Table 1
bellow. Type of food to be prepared at this site is more of "Ferenji" culture.

Type of Average unit

Quantity/day Capacity(Annual) Revenue( birr)
service price(birr)
Food 200 person 50 72,000 3,600,000.00
Beverage 500 bottles 14 180,000 2,520,000.00
Bed Night 5 bed 200 1,500 300,000.00
Total 6,420,000.00

4.2. Customers
4.2.1. Price Sensitivity
Based on the conducted on-site visits, we conclude that most customers are business people. Therefore,
we believe that there is certain flexibility in the price sensitivity for this customer segment due to the
fact that most customers stay one or two nights and the company usually covers the expenses. Hence,
the average business traveler is less price-sensitive. On the other side, we think that the average
customer travelling through Afar and some tourist prefers low or moderate prices. Therefore, the
average customer is rather price sensitive.

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 4.2.2. Customer Power

The relative high supply of hotels in the region implies a high customer power. This results in tense
competition and price pressure. Nevertheless, this is most likely only true in low demand periods such
as holidays. Most interviewees stated that during expositions and similar events most hotels are fully
booked and therefore customer power is lowered.

Conclusively, the customer power in the hotel business depends to a certain extend on seasonal events.
Though the customer power for Tourist is relatively low, since they are not bound to a certain location
and do not mind driving a few miles further. As mentioned the majority of customers are business
people and therefore the tourists do not take a big influence on the customer power.

4.2.3. Suppliers

We assume that due to the high availability of suppliers for almost all respects, the power of suppliers
is believed to be relatively low or at maximum moderate. There are no suppliers specialized only in the
hotel industry.

4.2.4. Marketing Strategy 

4.2.5. Target Market  

AnedentHotel will target consumers seeking a thirst quencher but looking for an alternative to Quality
food with minimum price.  The ideal service consumer is a  professional  or  mid‐ high  income earner,
male or  female, who  tries to  live  a healthy, active  lifestyle. They  are a conscious  shopper who
are aware  of  brands  and  identify with  them and  seek to  be involved  with  the community.  Our
service will meet the   quality required by   all customers.  

4.2.6. Competition  

The Andent Hotel Service concept brings a different product offering to customers unlike any of the

primary competition. The Gold customers will be the dedication and commitment to support the   local
community and charity organizations.  

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Some key differentiators for Andent Hotel Service product are  the  focus on  providing a  significant
benefit  to the  community  through a  15%  contribution  to  local   charities,  schools, or
other institutions;   no other business like Andent Hotel firm  specifically  provide  to  a  health  and
fitness targeted concept; prices will be competitive with  other  businesses who sell refreshments and be
verages. Andent Hotel project will serve a very niche market. The consumer makes the purchase decisi
on based on immediate thirst and availability.

These are the key facts about the Hotel

 5 Standard rooms and we will be expand the near future another 6 additional rooms.
 8 standard refrigerators
 6 stand TV
 100 chairs
 20 tables
 Above average capacity usage
 Typical clients are business people

4.3. Production Program

The service program of the proposed hotel and restaurant is assumed to start at 70% in the first year and
increases by 10% until 100% is reached in the consecutive year.

4.3.1. Raw Materials and Utilities

4.3.2. Availability and Source of Raw materials

Required raw materials for hotel service include food items, beverages (soft and alcoholic), room
clothing, detergents and the likes. All raw materials are available in the domestic market.

Annual Requirement and Cost of Raw Materials and Utilities

The cost of annual requirement of raw materials of the project is estimated as percentage of the
respective service revenue as indicated in Table 2 bellow.

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 Type Of Service Revenue Percentage Average Cost
Food 3,600,000.00 60% 2,160,000.00
Beverage 2,520,000.00 60% 1,512,000.00
Bed Night 300,000.00 10% 30,000.00
Total 3,702,000.00

4.3.3. Electricity & Water (Utility) and Furniture Cost Determination

Utility costof the project is estimated to be about Birr 2,718 per annum and cost of furniture and
equipment is Birr 187,000.

4.4. Production Process

The main processes of establishing Andent hotels near to Afar include studying the market, securing
land, constructing buildings, equipping and furnishing the buildings and starting the operations of
the businesses.

4.4.1. Furniture and Equipment

Furniture and equipment required for Andent hotel could broadly be classified into three categories.
These are;

 Bed room furniture,(includes beds, mattress, blankets, bed sheets, tables, chairs, cap boards, etc)
 Hotel furniture and equipments (tables ,chairs, glasses etc)
 Kitchen utensils ( forks, spoons, trays, dish, deep freezer, etc)

Estimated cost of such furniture and fixture and working capital for our hotel required with
additionally is estimated in Table 3 bellow.

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 Furniture and Fixture Quantity Cost in Birr
Bed room 6 bed & blankets 72,000
Tables 10 20,000
Chairs 40 20,000
Kitchen set 70,000
Office Furniture 5,000
Sub -Total 187,000
Working Capital Requirement 1,553,090.3
Total 1,740,090.3

Civil Engineering Cost

Andent Hotel will require about 450 m 2 of land, of which 200m2 is for the construction of G+ 3 hotels
with 11 self contend bed rooms. Assuming that the hotel will be made from traditional materials, the
investment cost for G+3 and other building in the compound is about Birr 4,619,530.07 (Birr 450 m2).

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5. HUMAN RESOURCE AND TRAINING REQUIREMENT
5.1. Human Resource

The project will require about 12 employees as indicated in Table 4 bellow with annual salary of Birr
237,600.

Salary Monthly Annual Salary

Sr. Required
Position Scale Salary Expense
No. Number
(Birr) (Birr) (Birr)
I. requirement of manpower
General Manager 1 5,000 5,000 60,000
Casher 1 2,500 2,500 30,000
Receptionist 1 1,500 1,500 18,000
Waiter 4 1,000 4,000 48,000
Kook 1 2,000 2,000 24,000
Assistant Kook 1 1,200 1,200 14,400
Cleaner 1 600 600 7,200
Driver 1 2,000 2,000 24,000
Guard 1 1,000 1,000 12,000
Grand Total 12 16,800 19,800 237,600
NB: Salary assumed to increase 5% annually

5.2. Training Requirement

For Hotel services trained manpower is available in the market.

General Manager

 Developing long term and annual objectives and strategies for the firm;
 Monitoring, evaluation and review of implemented strategies, objectives and plans for the plant;
General management in terms of planning, organizing, leading and controlling the business and
the resources of the firm;
 Management of the overall operation of the plant, sales, grading, etc.;
 Allocation and dictation of roles and responsibilities to the various employees;
 Maintenance of equipment and infrastructure;
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  Maintenance of a database on clients, amounts bought and sold and produce losses;
 Management of all financial requirements, sales, bookkeeping, taxes and duties etc.;
 Management of financial resources of the product;
 Decision-making on the financial structure of the plant, personnel management and marketing;
 Management of day to day marketing of the product;
 Identification and implementation of technology advancements for business development.

Receptionist

 Front sales, receptionist and switchboard operator

 Handling of petty cash

Security personnel

 Access control and administration of right of admission

 Alarm response
 Recording and reporting of suspicious activities
 Patrol duties and checking of premise for break-ins and damages
 Protection of personnel and assets; and Emergency services.
 24 hours each are needed, hence with in all times.

Waiters

 Sales and customer service on the floor;

 Regulation of produce sales;
 Act as cashier;
 Receiving cash, balancing and paying over of cash; and
 Reports to Operational Manager.

Cleaners

 Sweeping of floors, offices, ablutions;

 Refuse removal; and
 General cleaning of area equipment.

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6. BALANCE SHEET PROJECTION& FINANCIAL ANALYSIS

6.1. Financial Plan

The Financial Plan sets out the expected financial requirements to set up the hotel service gives an
indication of the estimated operational expenditures and likely incomes that could be generated by firm.

6.2. Source of Fund

The financial study shows that the total investment cost is birr 7,079,620.37 from the total planned
investment birr 1,553,090.3 is to be financed by CBE loan for working capital and birr 187,000 for
Furniture and equipment and birr 5,339,530.07 is already existed capital.

6.3. Expected Financial Results

Here, our objective is to provide information about the financial position, performance and changes in
financial position of the project to make rational economic decision. Hereunder, we will try to look
profit/loss or income statement forecast, cash flow and balance sheet projection, financial rate of return
of the project for potential variables.

Description Year 1 year 10

Sales Revenue 4,494,000.00 6,420,000.00
Profit (Loss) 394,156.72 956,780
Cumulative Cash Balance 630,343.71 9,526,241

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 6.4. Profit/Loss Forecast

Profit/loss forecast presents the results of project’s operations during a period of time. It shows income
earning from the project and expenses incurred in attaining the income. The projected profit/loss
statement reveals that the project will earn net profit of birr394,156.72 and birr 956,780during its first
and 10th project years respectively. This indicates that the project could run profitable business and can
maintain objective of its establishment at competitive quality and price.

6.5. Cash Flow Forecast

Cash flow projection provides a look at the movement of cash in and out of the project. It is important
in determining whether or not a project has enough cash to pay its bills, handle expenses and acquire
assets. Thus, it is important to give due attention to identify whether the total inflows of the project
have the capacity to cover all cash outflows during its operational period. Unless, the project will faces
liquidity crisis and fail before achieving its objective of establishment. Based on this fact, the
forecasted cumulative cash balance shows a balance of birr 630,343.71in the first year and will grow
up to birr 9,526,241at the end of project period, demonstrating that the project will not face liquidity
constraint to finance its operational costs as well as debt obligation.

6.6. The Payback Period of the Loan

The periodic lease payment which shall be paid each month beginning from 28- January, 2019 and
ending on 28-December, 2023 with sixteen (60) equal installments of birr 38,707.34.

Interest Rate 12 %

Pmt Schedule
Paymen Beginning Total
. d Principal Interest
t Date Balance Payment
No. Payment
1,740,090.0 38,707.3
1 28/1/19 0 4 38,707.34 21,306.44 17,400.90
1,718,783.5 38,707.3
2 28/2/19 6 4 38,707.34 21,519.51 17,187.84
3 28/3/19 1,697,264.0 38,707.3 38,707.34 21,734.70 16,972.64

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 5 4
1,675,529.3 38,707.3
4 28/4/19 5 4 38,707.34 21,952.05 16,755.29
1,653,577.3 38,707.3
5 28/5/19 1 4 38,707.34 22,171.57 16,535.77
1,631,405.7 38,707.3
6 28/6/19 4 4 38,707.34 22,393.28 16,314.06
1,609,012.4 38,707.3
7 28/7/19 5 4 38,707.34 22,617.22 16,090.12
1,586,395.2 38,707.3
8 28/8/19 4 4 38,707.34 22,843.39 15,863.95
1,563,551.8 38,707.3
9 28/9/19 5 4 38,707.34 23,071.82 15,635.52
28/10/1 1,540,480.0 38,707.3
10 9 3 4 38,707.34 23,302.54 15,404.80
28/11/1 1,517,177.4 38,707.3
11 9 9 4 38,707.34 23,535.57 15,171.77
28/12/1 1,493,641.9 38,707.3
12 9 2 4 38,707.34 23,770.92 14,936.42
464,488.0 270,219.0 194,269.0
9 0 9
1,469,871.0 38,707.3
13 28/1/20 0 4 38,707.34 24,008.63 14,698.71
1,445,862.3 38,707.3
14 28/2/20 7 4 38,707.34 24,248.72 14,458.62
1,421,613.6 38,707.3
15 28/3/20 5 4 38,707.34 24,491.20 14,216.14
1,397,122.4 38,707.3
16 28/4/20 5 4 38,707.34 24,736.12 13,971.22
1,372,386.3 38,707.3
17 28/5/20 3 4 38,707.34 24,983.48 13,723.86
1,347,402.8 38,707.3
18 28/6/20 5 4 38,707.34 25,233.31 13,474.03
1,322,169.5 38,707.3
19 28/7/20 4 4 38,707.34 25,485.65 13,221.70
1,296,683.8 38,707.3
20 28/8/20 9 4 38,707.34 25,740.50 12,966.84
1,270,943.3 38,707.3
21 28/9/20 9 4 38,707.34 25,997.91 12,709.43
28/10/2 1,244,945.4 38,707.3
22 0 8 4 38,707.34 26,257.89 12,449.45
28/11/2 1,218,687.6 38,707.3
23 0 0 4 38,707.34 26,520.46 12,186.88
28/12/2 1,192,167.1 38,707.3
24 0 3 4 38,707.34 26,785.67 11,921.67
464,488.0 304,489.5 159,998.5
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 9 3 6
1,165,381.4 38,707.3
25 28/1/21 6 4 38,707.34 27,053.53 11,653.81
1,138,327.9 38,707.3
26 28/2/21 4 4 38,707.34 27,324.06 11,383.28
1,111,003.8 38,707.3
27 28/3/21 8 4 38,707.34 27,597.30 11,110.04
1,083,406.5 38,707.3
28 28/4/21 7 4 38,707.34 27,873.28 10,834.07
1,055,533.3 38,707.3
29 28/5/21 0 4 38,707.34 28,152.01 10,555.33
1,027,381.2 38,707.3
30 28/6/21 9 4 38,707.34 28,433.53 10,273.81
38,707.3
31 28/7/21 998,947.76 4 38,707.34 28,717.86 9,989.48
38,707.3
32 28/8/21 970,229.90 4 38,707.34 29,005.04 9,702.30
38,707.3
33 28/9/21 941,224.86 4 38,707.34 29,295.09 9,412.25
28/10/2 38,707.3
34 1 911,929.76 4 38,707.34 29,588.04 9,119.30
28/11/2 38,707.3
35 1 882,341.72 4 38,707.34 29,883.92 8,823.42
28/12/2 38,707.3
36 1 852,457.80 4 38,707.34 30,182.76 8,524.58
464,488.0 343,106.4 121,381.6
9 3 6
38,707.3
37 28/1/22 822,275.03 4 38,707.34 30,484.59 8,222.75
38,707.3
38 28/2/22 791,790.44 4 38,707.34 30,789.44 7,917.90
38,707.3
39 28/3/22 761,001.01 4 38,707.34 31,097.33 7,610.01
38,707.3
40 28/4/22 729,903.68 4 38,707.34 31,408.30 7,299.04
38,707.3
41 28/5/22 698,495.37 4 38,707.34 31,722.39 6,984.95
38,707.3
42 28/6/22 666,772.98 4 38,707.34 32,039.61 6,667.73
38,707.3
43 28/7/22 634,733.37 4 38,707.34 32,360.01 6,347.33
38,707.3
44 28/8/22 602,373.37 4 38,707.34 32,683.61 6,023.73
38,707.3
45 28/9/22 569,689.76 4 38,707.34 33,010.44 5,696.90
46 28/10/2 536,679.32 38,707.3 38,707.34 33,340.55 5,366.79
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 2 4
28/11/2 38,707.3
47 2 503,338.77 4 38,707.34 33,673.95 5,033.39
28/12/2 38,707.3
48 2 469,664.81 4 38,707.34 34,010.69 4,696.65
464,488.0 386,620.9
9 1 77,867.18
38,707.3
49 28/1/23 435,654.12 4 38,707.34 34,350.80 4,356.54
38,707.3
50 28/2/23 401,303.32 4 38,707.34 34,694.31 4,013.03
38,707.3
51 28/3/23 366,609.01 4 38,707.34 35,041.25 3,666.09
38,707.3
52 28/4/23 331,567.76 4 38,707.34 35,391.66 3,315.68
38,707.3
53 28/5/23 296,176.10 4 38,707.34 35,745.58 2,961.76
38,707.3
54 28/6/23 260,430.52 4 38,707.34 36,103.04 2,604.31
38,707.3
55 28/7/23 224,327.48 4 38,707.34 36,464.07 2,243.27
38,707.3
56 28/8/23 187,863.42 4 38,707.34 36,828.71 1,878.63
38,707.3
57 28/9/23 151,034.71 4 38,707.34 37,196.99 1,510.35
28/10/2 38,707.3
58 3 113,837.72 4 38,707.34 37,568.96 1,138.38
28/11/2 38,707.3
59 3 76,268.75 4 38,707.34 37,944.65 762.69
28/12/2 38,707.3
60 3 38,324.10 4 38,707.34 38,324.10 383.24

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7. SOCIO ECONOMIC BENEFIT

Based on the foregoing presentation and analysis, we can learn that the proposed project
possesses wide range of benefits that complement the financial feasibility obtained earlier. In general
the envisaged project promotes the socio-economic goals and objectives stated in the strategic plan of
the Afar Regional State as well as promote tourisms of the country.

These benefits are listed as follows

A. Profit Generation

The project is found to be financially viable and earns on average a profit of birr 0.32 million per year
and birr 3.2 million within the project life. Such result induces the project promoters to reinvest the
profit which, therefore, increases the investment magnitude in the region.

B. Tax Revenue

In the project life under consideration, the region will collect about birr 515thousands from corporate
tax payment alone (i.e. excluding income tax, sales tax and VAT). Such result create additional fund

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for the regional government that will be used in expanding social and other basic services in the
region.

C. Employment and Income Generation

The proposed project is expected to create employment opportunity to 12 citizens of the country. This
would be one of the commendable accomplishments of the project.

D. Pro -Environment Project

The proposed production process is environment friendly.

8. CONCLUSIONS & RECOMMENDATIONS

8.1. Conclusion

Andent Hotel service was established with general objectives of to producing quality product for local
community & foreigners. The project is located in Awash town EasternEthiopia01kebele. Beside, the
proposed project is ideally located within all infrastructure and services available in the area.

The financial study shows that the total investment cost is birr7,079,620.37from the total planned
investment birr 1,553,090.3 is to be financed by CBE loan for working capital and birr 187,000 for
Furniture and equipment and birr 5,339,530.07 is already existed capital. After the implementation of
the project, it will become profitable. It will generate average net profit of Birr 394,156.72 and birr
956,780 during its first and 10th project years respectively in the projection period showing that the
project could run profitable business venture. Furthermore, the cash flow projection also shows a
positive cumulative net cash balance indicating that the project will not face liquidity problem to
finance its operational cost and meeting its debt obligation.

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 8.2. Recommendations

The government desperately needs to encourage the growth of the service industry because the sector
can provide job opportunity, sources of foreign exchange currency, and possibility for vertical
integration with other agriculture, industry and service sectors which in turn has paramount
importance for the overall economic development of the nation. Thus, The Envisaged hotel service
project will also add its own contribution on the development of the sector.

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