LumineScents Company

A Feasibility Study

Presented to

The Faculty of Integrated High School

Senior High School
Lagro High School
District V, Quezon City, Metro Manila

In Partial Fulfillment
Of the Requirements for the Subject
Research Project and Work Immersion

For the High School Diploma of

Accountancy, Business, and Management Strand
Second Semester - Academic Year 2022-2023

By
Leader:
Reyes, Candice A.
Members:
Espiritu, Glaiza Trisha C.
Carbonell, Lyka Nicole L.
Alvarez, Patrishia T.
Bognot, Nicole Ej P.
Abaloyan, Julia Sophia A.
Bual, Scottie C.
Aruta, Clark Aldos F.
Duran, Yeoj Simon Berns A.

Mary Grace A. Perfecto, LPT

Research Adviser

June 2023
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CHAPTER VI FINANCIAL FEASIBILITY

6.1. Financial Feasibility Objectives

When it comes to finance, the LumineScents Company has the goal of

researching what can be learned about business feasibility to determine it. As we

are just starting to do business, our company is still struggling when it comes to

finances, how to estimate and properly handle the possible costs of the project

we will carry out. That's why, as beginners, we insist on learning what we don't

know yet when it comes to finance, because we know that it will be very helpful

and will lead to the success of our project. We will face many challenges, one of

which is the concern of project costs to be carried out, so our company,

LumineScents, will make possible strategies for the challenges we face to be

solved. That is why the following are strategies or goals of LumineScents

Company so that the financial aspect that we will carry out can be filled properly:

1. We research possible expenses so that when the expenses we face come

up, we can estimate them.

2. We will plan possible solutions to the challenges we will face in the future,

so that our company will be ready when those challenges come and we

will not grumble.

3. We must know how much we are spending on the project we are going to

carry out, so that our company is financially aware.

4. Our company wants to know if the project we have implemented is

financially feasible or not.

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5. After we have executed the project and if it has been successful, our

company wants to achieve a return on investment.

6.2. Financial Assumptions

Financial assumptions are critical to the success of any business or investment.

These assumptions are a set of estimates and projections used to forecast future

financial performance based on current information and historical data. Financial

assumptions play a vital role in helping businesses make informed decisions

about their growth strategies, capital expenditures, pricing, and profitability. The

process of developing financial assumptions involves analyzing various factors

that can impact revenue and expenses, such as market trends, competition,

economic conditions, and industry regulations. A thorough understanding of

these factors is essential for creating realistic financial models that accurately

reflect the expected outcomes.

1. Capital Investment is P250,000 broken down into the ff.

● P250,000 invested equally by 9 partners.

2. Income is distributed equally.

3. Tax rate is 20% same with current Philippine corporate tax rate.

4. Utilities expense increases 5% annually.

5. Selling price of the product is computed using cost plus method. 30% is

added to the cost to compute SRP.

6. The selling price remains the same throughout the 5-year projection.
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7. (PPE) Property, Plant and Equipment's useful lives is 5 years.

8. Office supplies expense increases 5% annually.

9. Taxes and Licenses renewing process: 3% quarterly percentage tax, 0.5%

annual local business tax.

10. Rent Expense remains the same throughout the 5-year projection as

specified in the Lease Contract.

11. Advertising Expense, P 12,000.

6.3 Selling Price

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Table 1: Direct and Indirect Material, Labor Cost Per Unit, and

Manufacturing

Overhead
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Table 2: LumiScents Co. Selling Price

6.4 Inventory Schedule

Table 3: LumiScents Co. Yearly Finished Goods (In Unit)

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Table 4: LumiScents Co. Yearly Finished Goods (At Cost)

6.5 Sales Schedule

Table 5: LumiScents Co. Sales Schedule

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6.6 Property, Plant, and Equipment

Table 6: LumiScents Co. Property, Plant, and Equipment Schedule

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6.7 Expenses Schedule

Table 7: Salaries Expense

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Table 9: Utilities and Communication Table 8: SSS, HDMF, PhilHealth

Expenses

Table 10: Taxes and Licenses

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Table 11: Depreciation Expense

6.8 Income State Month

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Table 12: LumiScents Co. Statement of Comprehensive Income (Year 2024)

Table 13: LumiScents Co. Statement of Comprehensive Income (Year 2025)

Table 14: LumiScents Co. Statement of Comprehensive Income (Year 2026)

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Table 15: LumiScents Co. Statement of Comprehensive Income (Year 2027)

Table 16: LumiScents Co. Statement of Comprehensive Income (Year 2028)

6.9 Income State Year

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Table 17: LumiScents Co. Income State Year

6.10 Changes in Equity

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Table 18: LumiScents Co. Statements of Changes in Partner’s Equity

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6.11 Balance Sheet

Table 19: LumiScents Co. Statement of Financial Position

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6.12 Cash Flows

Table 20: LumiScents Co. Statement of Cash Flow

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6.13 Fixed and Variable Expense

Table 21: LumiScents Co. Fixed and Variable Expense

6.14 Break-Even Analysis

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Table 22: LumiScents Co. Break Even Analysis

6.15 Payback Period & ROI

Table 23: LumiScents Co. Payback Period, ROI and Net Present Value