V.

FINANCIAL ASPECT

The proposed project has an budgetary require of Php 1,614,250.00 to start with. The project will be financed by the owner’s

equity (50%) with a total of Php 807,125 and bank loan of (50%.) Php 807,125.. This loan will be amortized in ten years installment

with an interest rate of 17% per anum. The total project cost is Php 1,614,250 that will be financed by 50% owner’s equity and 50%

from bank loan.

The project financial cash flows of the project yield an acceptable IRR of 46.19% . at an estimated hurdle rate of 17%, the

project is therefore considered financially viable. Likewise, the project cash flows also show that the projected revenues of the project

can meet its debt requirements as scheduled. Result of the Benefit Cost Analysis reveal that the project is financially viable at 17%

assumed rate of interest or cost of capital. The proposed project has a benefit cost ratio of 1.24, net present worth of Php

20,980,162.03 and payback period of 7 months.

The total budgetary requirement of the proposed project as per estimate is itemized and presented as follows.

Capital Outlay
ITEM ESTIMATED VALUE
Tools and Equirment P 100,000.00
Delivery Vehicle 150,000.00
Renovation of facilities 100,000
Other investment 50,000
Sub-Total 300000

Operating Capital Requirement

A. Raw Materials
20,000kgs of tilapia @ (P50/kg) 1,000,000.00
Salt 2,000.00
Food Coloring 2,000.00
Other Ingredients 2,000.00
B. Packing Materials 3,000.00
C. Wages an Salaries of Workers 61,500.00
D. Transportation Cost 10,000.00
E. Marketing Cost 10,000.00
F. Office Supply 12,000.00
G. Other Cost (electricity,fuel,oil,etc) 15,000.00
Sub-Total 1,117,500.00

Pre-Operating Expense
Project Study Preparation P 50,000
Contingencies (10%) P 146,750
Grand Total 1,614,250
(50%)OE=P 807,125
(50%)LOAN=P 807,125
 JDG TILAPIA PROCESSING ENTERPRISE
PROJECTED COST OF GOODS
Year 1 to10

Projected Cost of

Good Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Tilapia 20,000 kgs

@ P50 12,000,000 13,200,000 14,520,000 15,972,000 17,569,200 19,326,120 21,258,732 23,384,605 25,723,066 28,295,372

Salt 24,000 26,400 29,040 31,944 35,138 38,652 42,517 46,769 51,446 56,591

Food Coloring 24,000 26,400 29,040 31,944 35,138 38,652 42,517 46,769 51,446 56,591

Other Ingreduients 24,000 26,400 29,040 31,944 35,138 38,652 42,517 46,769 51,446 56,591

Packaging

Materials 36,000 39,600 43,560 47,916 52,708 57,978 63,776 70,154 77,169 84,886

TOTAL 12,108,000 13,318,800 14,650,680 16,115,748 17,727,323 19,500,055 21,450,061 23,595,067 25,954,573 28,550,031
JDG TILAPIA PROCESSING ENTERPRISE
PROJECTED INCOME STATEMENT
Year 1 to10

Projected Cost of Good Year 6 Year 7 Year 8 Year 9 Year 10

Tilapia 20,000 kgs @ P50 19,326,120 21,258,732 23,384,605 25,723,066 28,295,372

Salt 38,652 42,517 46,769 51,446 56,591
Food Coloring 38,652 42,517 46,769 51,446 56,591
Other Ingreduients 38,652 42,517 46,769 51,446 56,591
Packaging Materials 57,978 63,776 70,154 77,169 84,886
TOTAL 19,500,055 21,450,061 23,595,067 25,954,573 28,550,031
Project Sales Year 6 Year 7 Year 8 Year 9 Year 10
Smoked Tilapia 40,000 packs@ P35 27,056,568 29,762,225 32,738,447.50 36,012,292.25 39,613,521.47
TOTAL 27,056,568 29,762,225 32,738,447.50 36,012,292.25 39,613,521.47
Projected Operating Expense Year 6 Year 7 Year 8 Year 9 Year 10
A. Raw Materials 17,835,373 19,618,911 19,739,699 21,713,669 23,885,036
B. Wages and Salaries 1,098,075 1,207,883 1,229,141 1,352,055 1,487,261
C. Marketing Cost 193,261 212,587 234,233 257,656 283,421
D. Transportation Cost 196,775 216,453 239,750 263,725 290,098
E.Office Supply 211,797 232,976 236,938 260,632 286,695
F.Interest Charge 68605.625 54884.5 41163.375 27442.25 13721.125
F. Deppreciation 30,000 30,000 30,000 30,000 30,000

G. Other Cost(fuel,elec,water,etc) 2,227,862 2,450,649 4,611,405 5,072,546 5,579,801

TOTAL 21,861,749.36 24,024,342.61 26,362,330.06 28,977,725.60 31,856,032.81
Net Income 5,194,819 5,737,882 6,376,117 7,034,567 7,757,489
Sales Increase 10% every year Increase 10% every year

JDG TILAPIA PROCESSING ENTERPRISE

 PROJECTED INCOME STATEMENT
Year 1 to10
Projected Cost of Good Year 1 Year 2 Year 3 Year 4 Year 5

Tilapia 20,000 kgs @ P50 12,000,000 13,200,000 14,520,000 15,972,000 17,569,200

Salt 24,000 26,400 29,040 31,944 35,138
Food Coloring 24,000 26,400 29,040 31,944 35,138
Other Ingreduients 24,000 26,400 29,040 31,944 35,138
Packaging Materials 36,000 39,600 43,560 47,916 52,708
TOTAL 12,108,000 13,318,800 14,650,680 16,115,748 17,727,323
Project Sales Year 1 Year 2 Year 3 Year 4 Year 5
Smoked Tilapia 40,000 packs@ P35 16,800,000 18,480,000 20,328,000 22,360,800 24,596,880

TOTAL 16,800,000 18,480,000 20,328,000 22,360,800 24,596,880

Sales Increase 10% every year

Projected Operating Expense Year 1 Year 2 Year 3 Year 4 Year 5

A. Raw Materials 12,108,000 13,318,800 14,650,680 14,739,978 16,213,976
B. Wages and Salaries 738,000 811,800 892,980 907,500 998,250
C. Marketing Cost 120,000 132,000 145,200 159,720 175,692
D. Transportation Cost 120,000 132,000 145,200 162,624 178,886
E.Office Supply 144,000 158,400 174,240 175,039 192,542
F.Interest Charge 137,211.25 123490.125 109769 96047.875 82326.75
F. Deppreciation 30,000 30,000 30,000 30,000 30,000
G. Other Cost(fuel,elec,water,etc) 180,000 198,000 217,800 1,841,209 2,025,329
TOTAL 13,577,211.25 14,904,490.13 16,365,869.00 18,112,117.08 19,897,002.87
Net Income 3,222,789 3,575,510 3,962,131 4,248,683 4,699,877

Increase 10% every year

JDG TILAPIA PROCESSING ENTERPRISE
Depreciation Schedule
 Year 1 to10

Year Book Value Annual Depreciation Net Book Value

Year 1 300,000 30,000 270,000

Year 2 270,000 30,000 240,000

Year 3 240,000 30,000 210,000

Year 4 210,000 30,000 180,000

Year 5 180,000 30,000 150,000

Year 6 150,000 30,000 120,000

Year 7 120,000 30,000 90,000

Year 8 90,000 30,000 60,000

Year 9 60,000 30,000 30,000

Year 10 30,000 30,000

JDG TILAPIA PROCESSING ENTERPRISE

LOAN AMORTIZATION SCHEDULE
P 807,125.00 Principal
17% Interest Rate

YEAR Total Amortization Interest Principal Balance

0 807,125.00
1 217,923.75 137,211.25 80,712.50 726,412.50
2 204,202.63 123490.125 80,712.50 645,700.00
3 190,481.50 109769 80,712.50 564,987.50
4 176,760.38 96047.875 80,712.50 484,275.00
5 163,039.25 82326.75 80,712.50 403,562.50
6 149,318.13 68605.625 80,712.50 322,850.00
7 135,597.00 54884.5 80,712.50 242,137.50
8 121,875.88 41163.375 80,712.50 161,425.00
9 108,154.75 27442.25 80,712.50 80,712.50
10 94,433.63 13721.125 80,712.50

JDG TILAPIA PROCESSING ENTERPRISE

PROJECTED CASH FLOW STATEMENT
 Year 0 to10
Cash Receipts: Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Bank Loan 807,125 0 0 0 0 0
Owner's Equity 807,125 0 0 0 0 0
Sales of Smoked Tilapia 0 16,800,000 18,480,000 20,328,000 22,360,800 24,596,880
Depreciation 0 30,000 30,000 30,000 30,000 30,000
Total Cash Receipts 1614250 16,830,000 18,486,600 20,334,600 22,367,400 24,603,480

Cash Disbursements:
A. Initial Capital Outlay
Loan Amortization 0 179,462.25 168,162.78 130,276.30 145,563.83 134,264.35
P
Tools and Equirment 100,000.00 0.00 0.00 0.00 0.00
Delivery Vehicle 150,000.00 0.00 0.00 0.00 0.00 0.00
Renovation of facilities 100,000 0.00 0.00 0.00 0.00 0.00
Other fixed investment 50,000 0.00 0.00 0.00 0.00 0.00
B. Pre-Operating Expense 50,000 0 0 0 0 0
C. Operating Expense
Raw Materials 0 12,108,000 13,318,800 14,650,680 14,739,978 16,213,976
Wages and Salaries 0 738,000 811,800 892,980 907,500 998,250
Marketing Cost 0 120,000 132,000 145,200 159,720 175,692
Transportation Cost 0 120,000 132,000 145,200 162,624 178,886
Office Supply 0 144,000 158,400 174,240 175,039 192,542
Interest Charge 0 137,211.25 123490.125 109769 96047.875 82326.75
. Deppreciation 0 30,000 30,000 30,000 30,000 30,000
Other
Cost(fuel,elec,water,etc) 0 180,000 198,000 217,800 1,841,209 2,025,329
Total Cash Disbursement 350,000 13,756,673.50 15,072,652.90 16,496,145.30 18,257,680.90 20,031,267.22

Net Cash Flow 1,264,250 3,073,327 3,413,947 3,838,455 4,109,719 4,572,213

Add: Beginning Cash
Balance 0 1,238,350 4,448,887.75 8,009,724.98 11,981,348.67 4,677,939.53
16,210,515.6
Cash Balance, End 1,238,350 4,448,887.75 8,009,724.97 11,981,348.68 50 9,355,879.06

JDG TILAPIA PROCESSING ENTERPRISE

 PROJECTED CASH FLOW STATEMENT
Year 0 to10
Cash Receipts: Year 6 Year 7 Year 8 Year 9 Year 10
Bank Loan 0 0 0 0 0
Owner's Equity 0 0 0 0 0
Sales of Smoked Tilapia 27,056,568 29,762,225 32,738,447.50 36,012,292.25 39,613,521.47
Depreciation 30,000 30,000 30,000 30,000 30,000
Total Cash Receipts 27,056,568 29,792,225 32,768,447.50 36,042,292.25 39,643,521.47
Cash Disbursements:
A. Initial Capital Outlay
Loan Amortization 122,964.88 111,665.40 100,365.93 89,066.45 77,766.98
Tools and Equirment 0.00 0.00 0.00 0.00 0.00
Delivery Vehicle 0.00 0.00 0.00 0.00 0.00
Renovation of facilities 0.00 0.00 0.00 0.00 0.00
Other fixed investment 0.00 0.00 0.00 0.00 0.00
B. Pre-Operating Expense 0 0 0 0 0
C. Operating Expense
Raw Materials 17,835,373 19,618,911 19,739,699 21,713,669 23,885,036
Wages and Salaries 1,098,075 1,207,883 1,229,141 1,352,055 1,487,261
Marketing Cost 193,261 212,587 234,233 257,656 283,421
Transportation Cost 196,775 216,453 239,750 263,725 290,098
Office Supply 211,797 232,976 236,938 260,632 286,695
Interest Charge 68605.625 54884.5 41163.375 27442.25 13721.125
. Deppreciation 30,000 30,000 30,000 30,000 30,000
Other Cost(fuel,elec,water,etc) 2,227,862 2,450,649 4,611,405 5,072,546 5,579,801
Total Cash Disbursement 21,984,714.23 24,136,008.01 26,462,695.98 29,066,792.05 31,933,799.78

Net Cash Flow 5,071,854 5,656,217 6,305,752 6,975,500 7,709,722

Add: Beginning Cash Balance 9,355,879.06 14,519,738.453 20,230,839.7478 26,577,754.64 33,580,697.93
Cash Balance, End 14,519,738.45 20,230,839.75 26,577,754.64 33,580,697.09 41,304,139.91
JDG TILAPIA PROCESSING ENTERPRISE
 BENEFIT AND COST SUMMARY

YEAR Gross Benefit Gross Costs Net Benefits

0 0 350,000 -350,000

1 16,800,000 13,577,211.25 3,222,788.8

2 18,480,000 14,904,490.13 3,575,509.9

3 20,328,000 16,365,869.00 3,962,131.0

4 22,360,800 18,112,117.08 4,248,682.9

5 24,596,880 19,897,002.87 4,699,877.1

6 27,056,568 21,861,749.36 5,194,818.6

7 29,762,225 24,024,342.61 5,737,882.2

8 32,738,447.50 26,362,330.06 6,376,117.4

9 36,012,292.25 28,977,725.60 7,034,566.7

10 39,613,521.47 31,856,032.81 7,757,488.7

TOTAL 267,748,734.02 216,288,871 51,459,863.3

BENEFIT COST RATIO =1.24
NET PRESENT WORTH AT 17% =20,980,162.03
NET PRESENT WORTH AT 25% =15,237,448.86
INTERNAL RATE OF RETURN =46.19%
PAYBACK PERIOD = 0.67years or 7 months