Feasibility Study of

4,000 SQM RESORT IN

TRECE MARTIRES, CAVITE

by
CARTUJANO, ELLEN MAE M.
PCU BSREM-3B

Date : April 23, 2024

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 TABLE OF CONTENTS

Description of the Project 3

Industry Analysis 9

Industry competitiveness 13

Technical Feasibility 16

Legal 16

Physical 20

Organizational 25

Project Capital Requirement 34

5year Financial Projections 37

Financial Analysis 41

Study Conclusions 42

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 Description of the Project

Profile of Trece Martires Municipality (Geography)

Location: The heart of Cavite Province

Region: CALABARZON

Province: Cavite, 7th District

Founded: May 24, 1955

Named for: Thirteen Martyrs of Cavite

Neighboring Towns: Bounded north and northwest by the municipality of Tanza, west
and southwest by the municipality of Naic, south by the municipality of Indang,
southeast by the municipality of Amadeo and east by the city of General Trias.

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Area: 39.10 km2 (15.10 sq mi)

Population: 210,503 (2020 Census)

Barangays: (13) Trece Martires is politically subdivided into 13 barangays. Each

barangay consists of puroks and some have sitios.The city was subdivided by Senator
Justiniano Montano and Congressman Jose Cajulis. Each barangay was named after
one of the Thirteen Martyrs of Cavite to commemorate their bravery and heroism.

Topography: ground elevation ranging from 30 metres (98 ft) to nearly 400 metres
(1,300 ft). Its ground slope ranges from 0.5 to 2%. The land area is fairy well dissected
by creeks and streams that are deeply cut, characterized by steep and abrupt banks.
These almost parallel drainage lines flow in northern direction to discharge into
either Manila Bay or Laguna de Bay.

Industries: Historically, the city economy was reliant on agriculture. However, with the
conversion of land from agricultural to commercial, industrial and residential purposes,
this has changed, leading to a decrease in farming activity. Conversely, the services
sector is growing.

Climate: Trece Martires City has a tropical climate (Köppen climate classification: Aw)
with two pronounced seasons: wet and dry. Wet season covers the period from May to
December of each year; dry season covers January to April.

People/Language: Tagalog, English

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HISTORY

Township

Trece Martires started as one of the largest and most remote barrios of Cavite.

Originally named Quinta or Quintana, it was part of the municipality of Tanza. The land

was basically agricultural subdivided into cattle ranches and sugar farms, with less

than 1,000 hectares, at the intersection of the present Tanza–Trece Martires–Indang

Road (Tanza–Trece Martires Road / Trece Martires–Indang Road) and the Naic–

Dasmariñas Road (now part of Governor's Drive).

Trece Martires City Hall

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Cityhood

The city was established on May 24, 1954, under Republic Act No. 981 ("The Charter

of Trece Martires City") as approved by President Ramon Magsaysay. The Republic

Act also transferred the provincial seat of government from Cavite City to Trece

Martires. The original bill, House Bill 1795, was authored by Congressman Jose T.

Cajulis (1954–1957) and Senator Justiniano S. Montano (1949–1956).

Under the city charter, the Governor of Cavite is ex-officio mayor of Trece Martires;

then-Governor Dominador Mangubat was installed as the city's first chief executive. On

January 2, 1956, the provincial capital was formally inaugurated, the same day when

Delfin N. Montano (the son of former Senator Justiniano Montano) was sworn into

office as the new governor. He served in both offices from 1956 to 1971.[6]

On June 22, 1957, the original act was amended by Republic Act No. 1912 increasing

its territory to 3,917 hectares (39,170,000 m2), more or less. Consequently, the

municipalities of Indang and General Trias had to yield parts of their respective areas

to this territorial expansion.

The provincial-local power company was established in 1957, as the Cavite Electricity

Distribution Authority. The company would later also manage communications

infrastructure.

The city high school was established in 1966, becoming nationalized later in 1983.

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General Objectives of the Business

a) To offer one of the newest resort developmenty in the area

b) To respresent a more affordable but aesthetic leisure destination in Trece

c) To attract tourism and commercial businesses within the area

d) To satisfy customers by offering a comfortable location to relax and

enjoy local destinations

Map of Trece Martires, Cavite

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THE PROPERTY

LAND TITLE

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LOT SKETCH

ZONED AS COMMERCIAL

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 Market Feasibility

Market Description

“4,000 SQM Resort”, will provide the target market the satisfaction by offering a

comfortable location to relax and enjoy local destinations

The locals and tourist around Trece Martires, Cavite are the proposed target

market of the study who might be potential proponents in looking up a resort and a

local stay especially during the summer season.

Lack of competitors might be one of the strengths of this business

because there are only 5 hotels and resorts registered in Municipality of Trece as

of 2023.

Industry Analysis

Projected sales

Pricing Policies /Abstract Purpose

The purpose of this study is twofold: to determine resort customers’ preference among

resort amenities pricing strategies, specifically a bundled, all-inclusive charge in the

form of a resort fee, a limited choice resort fee at a lower price or a la carte pricing, and

to determine whether hotel customer prefer bundled or partitioned pricing when faced

with a mandatory resort fee.

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 Design/methodology/approach

An online survey of participants aged 18 years and older who had taken an overnight

leisure trip in the past six months is conducted. A fixed-choice set conjoint analysis is

performed to analyze the 353 usable surveys.

Findings

Results of this conjoint analysis show that 67 per cent of respondents prefer bundled

pricing over partitioned pricing. Respondents also show higher utility for no resort fee

and paying for amenities based on usage instead of being forced to pay a mandatory

resort fee.

Practical implications

Guest preferences for pricing strategies can provide hotel operators with valuable

information on how to establish pricing structures. Results suggest that hotel operators

could benefit from presenting a bundled price inclusive of room rates and mandatory

fees.

Originality/value

This is the only known study that examines mandatory fees in which customers receive

additional amenities or services in exchange for an additional surcharge. This study

also adds to the literature on pricing research in the hospitality industry.

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 Target Customer Resort Fee

Tourist/ Local Customer 450 - Adult

200 - Kids

Marketing Strategies

An Asian Themed Resort with a farm ambiance located along Hugo Perez

Road, Trece Martires, Cavite is considered to be a strategic location for a Resort to let

the visitors relax and feel pure fresh air and refreshing energy within the property.

Every single year, millions of people go on vacation, traveling to resorts to

enjoy the atmosphere and the many amenities that they provide. With so many

competing resorts, however, resort managers must market their best amenities to

show travelers that what they have to offer is better than the next resort.

A great resort marketing plan includes a variety of marketing strategies,

including advertising, public relations, promotions, sales, and any events or activities

that promote a resort.

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 Promotion
Go Mobile

One of the first things you should consider is going mobile before anything else.

While mobile-friendly websites used to be a great suggestion, now, they are a must.

Mobile devices are how most customers are interacting with the internet these days,

and even Google’s algorithm ranks its websites in a “mobile-first” manner.

It’s important that you are able to reach your guests where they go first, and most

guests are looking at their phones roughly three hours per day. It’s equally crucial that

your mobile site loads quickly because you can lose visitors if it takes longer than three

seconds to load.

Online Reviews Management

When you manage your online reviews, you manage your online reputation, which is

crucial for any business. If you have a bad review or multiple bad reviews, you can

drive potential visitors away.

Doing so can hurt your business for years to come.

When you proactively manage your luxury resort’s reputation, you hold more power.

It’s important to stay on top of websites such as Yelp and TripAdvisor, though also

crucial that you keep your eyes on less industry-specific sites such as Google

Business Profile.

Social Media

Ensure resort uses at least a single social media platform to market your offerings.

Social media is one of the most widespread forms of marketing in the world today.

Today,you can’t afford to leave social media out of your plan.

If you want to market to younger consumers, you might consider heading over to
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Twitter or Instagram. Make sure your content is consistently updated and appeals to

your customers.

Strategy should revolve around user-generated content, wherein you share any

content made by your visitors.

Video Marketing

Hotels and resorts find video marketing to be very effective. With this type of resort

marketing, you don’t have to try and describe what your property looks like to your

customers. Rather, you can just show them through high-quality video and video

storytelling.

The beauty of videos is that you can repurpose them for multiple platforms.

For example, while you might have a long-form marketing video on YouTube, you

could cut that same video into short clips for use in marketing emails or social media.

Hiring A Marketing Company For Resorts

While you can theoretically take on all of the marketing tasks above, your time is likely

better spent worrying about the daily operations of your business and how you can

continue to grow and evolve.

A strong marketing company can build you a high-converting website, post on your

social media, manage your reputation, and create email marketing content that is

effective.

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 Sales Plan

The sales plan aids on making a good impression to the existing and/or

potential customers of the business. The business will see to it that the customers

will be satisfied by providing quality services and at the same time, actively

monitoring their feed backs and satisfaction. The owners should be in active

communication to its customers to check their state in the space and make

necessary agreements and improvements that they will demand. Emphasis will be

more on client retention over new client acquisition since I will be difficult for the

business to acquire customers that will stay over a long time in the space that will be

offered. Moreover, loyalty and trust for existing customer yields a favorable and

constant sales for the business and it makes the business to be in continuous

operations and in a harmonious relationship to its customers

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 Industry competitiveness

SWOT Analysis

Strengths
- The Resort’s location
- The hotel or chain’s brand reputation
- Amenities and facilities
- High-quality services
- Effective Marketing
- Loyal customer base
- Less competitors within the area

Weaknesses
- Do we have the budget?
- Insufficient Marketing Efforts
- Dependence on seasonal visitors

Opportunities
- Market Expansion
- Technological Advancements
- Service Diversification
- Event Hosting

Threats
- Economic Instability
- Competition in travel destination
- Environmental Factors

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 Technical Feasibility

Legal

After determining the details about the marketing aspects such as marketing

strategies, promotions, and etc. the technical factors will be analyzed. The cost of

the materials used inestablishing the rental spaces will be deduced. Also, the

location of the business will be shown as well as the technology that may be used

while the business is operating. The technical aspect will indicate the logistic plan on

how the business will deliver and provide its service. The expense of the

establishing process should be reasonable and based on factual costing to verify the

feasibility of the business

Every technical aspect will be taken into account for the technical soundness

analysis which will serve as basis in physically reaching the market.

In regards with projecting the technical feasibility, the following technical

requirements needed by the business will be as follows:

1. By stating the:

 The quality of the service to be offered

 The supplies used

 The labor needed

 The utilities needed;

2. By showing the estimated total project cost and enumerating the major

items of capital cost; and

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 3. By providing information about the source of capital of the project

Objectives:

1. To identify the kind of service the business offers which includes

the description and its processes.

2. To determine the process in establishing a business

3. To illustrate the actual size of the resort as well as its layout

4. To determine the supplies necessary and the materials used in

building the infrastructure

5. To emphasize the regulations of the business

6. To know the ways for the maintenance of the establishments

Services Offered

 Asian Themed Resort with a farm ambiance

Service Processes

You’ll find that resort management starts with ownership and an executive team. This
group will develop and define the resort’s vision, laying out the mission and standards
everyone in the organization will follow.
Resort leadership will go on to define the measures necessary to bring their vision to
reality and create a comfortable and memorable stay for everyone who visits. Like any
operation, they understand that in order to manage budgets, ensure the highest quality
ingredients, and maintain high standards in presentation and service, they must
delegate tasks to highly specialized professionals in areas such as food and beverage
services.
However, there is much more to resort management.

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Lodging Operations
Oversight of lodging operations might be one of the most critical areas of hospitality
management. The manager in this role oversees the facilities and property
management in general. More specifically, they monitor guest satisfaction during
overnight stays to ensure customer satisfaction with food service, landscaping, interior
maintenance, and much more.
Duties might include:
 Handling guest check-ins and check-outs.
 Providing concierge services.
 Managing housekeeping and front desk staff.

Recreational Facilities
Anyone heading off for a resort wants plenty of recreational opportunities. Therefore,
resorts need managers in this area at the top of their game to help develop suitable
recreational activities based on anticipated enjoyment and participation, the cost
versus potential participation, and how much the activities can attract future guests.
Duties might include:
 Hiring and training staff.
 Developing and implementing activities and events.
 Maintaining equipment and facilities
 Ensuring all safety standards are met.

Food Services
As noted above, resorts need experts in food service management to ensure top-
quality food ingredients, preparation, presentation, and customer satisfaction. If you
pursue this role, you’ll be responsible for your hotel resort’s restaurant, catering, and
room service operations.
The primary duties in this role include:
 Creating a budget for the kitchen according to the number of upcoming guests
compared to previous records with similar details.
 Ensuring you have the necessary kitchen, hosting, and waitstaff coverage,
managing the hiring process, and scheduling accordingly throughout the season.
 Providing staff with a policy manual to avoid misunderstandings and confusion that
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 could lead to unsatisfactory guest experiences.
 Performing regular staff appraisals.
 Maintaining food safety standards and quality.
 Maintaining consistent stock, and regularly conducting an inventory of food
ingredients and kitchen supplies.
 Interacting with guests to obtain feedback and let them know you care about their
enjoyment.

Human Resources
While certain administrators, such as food and beverage managers, handle specific
aspects of the hiring and employee management process, human resources also play
a role. Since a hotel resort has so many areas to cover, it makes sense to have a
professional human resources (HR) team on duty.
HR professionals can help your team by:
 Reviewing resumes to pinpoint the strongest candidates per departmental job
descriptions.
 Conducting the first round of interviews to vet candidates.
 Facilitating employee development by coordinating special training for their roles
and those seeking promotions.
 Helping promote the resort’s values to applicants as candidates, during
onboarding, and throughout their employment.

Guest Services
Guest service professionals serve as the face of the resort, assisting customers in
helping them have an enjoyable and comfortable experience. You usually find these
professionals stationed at the hotel desk or a kiosk in the resort lobby.
These professionals must be highly visible and easily accessible to hotel guests in the
spa industry, sports facilities, and luxury resorts.
Duties might include:
 Checking guests in and out of the resort.
 Assisting guests in navigating the resort, city, activities, and events.
 Alerting baggage staff for assistance.
 Accommodating special requests.
 Answering phone calls and emails.
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 Providing recommendations based on study or personal experience.
 Processing payments and issuing room keys.

Taxes

The owner of the resort will have to pay different taxes issued by the municipal. One
of those is the Real Property Tax (RPT) annually as per stated under Local
Government Code of the Philippines (Republic Act No. 7160). The cost of the tax will
be ranging between 1 percent of the assessed value of the real property. The owner
must pay RPT to the municipal treasurer’s office and any delay on payments will cost
penalties

Maintenance and Repairs

Maintenance and repairs are essential facets of resort management, ensuring the
seamless operation and longevity of facilities while upholding guest satisfaction.
Regular upkeep encompasses various areas, including structural integrity, electrical
systems, plumbing, landscaping, and amenities such as pools and spas. Scheduled
inspections and preventive maintenance protocols mitigate potential issues before they
escalate, fostering a safe and comfortable environment for guests. Additionally, swift
response to repair requests and addressing issues promptly contribute to guest
retention and positive reviews. By prioritizing maintenance and repairs, resorts uphold
their reputation for excellence and create memorable experiences for patrons,
fostering loyalty and repeat visits.

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 Physical

Resort Location

A prime resort location is not merely about scenic beauty but also strategic
accessibility and a blend of amenities and attractions that cater to diverse preferences.
Ideally situated amidst natural wonders or breathtaking landscapes. Accessibility,
whether through proximity to major transportation hubs or ease of reaching local
attractions, enhances the overall guest experience. Furthermore, a well-chosen
location integrates seamlessly with the resort's offerings, complementing recreational
activities. A perfect resort location strikes a harmonious balance between tranquility
and convenience, enticing guests with the promise of relaxation, adventure, and
cultural immersion.

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Asian Themed Resort

Site Development Plan

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Floor Plan

Building Cost

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Page 25 of 48
Building Maintenance

The commercial building owner will lease the spaces for 15,000 each per

month. There searchers concluded that further renovations and maintenance must

be made to meet the need sand demand of the leasers. The following costs were

estimated:

Carpentry works

Description Quantity Unit Unit Cost Total

Paint 6 Gallon 673.00 4,050.00

Paint Roller 2 Pcs 299.00 598.00

Labor 2 1000.00

Total P5,648.00

Equipment and Fixtures

Equipment and Fixtures will be purchased in Davao de oro City

through cash. All equipment and fixtures are on its brand new state to ensure the

quality and usefulness of each. Ensuring the quality and usefulness of those will

responds to the demands and wants of the leasers. The price of each equipment and

fixtures were from trusted sources

Description Use Qty Unit cost Total

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 CCTV camera Used for surveillance, 2 740.00 1,480.00

monitoring, and theft

prevention

Glass Doors An equipment that is used for 3 7,511.00 22,533.00

the entrance of customers in

a room.

Trash Bin Important in maintaining 3 240.00 720.00

cleanliness and sanitation

inside and outside a room.

Total P24,733.00

Utilities/Facilities

The building’s electricity will be provided by FIBECCO, water by KIbawe

Water District. Each spaces will be having different meter for both electric and water

bill. The following cost for instillation of electricity and water will be listed below

Description Unit Cost Quantity Total Cost

Electricity 9,000.00 11 99,000.00

Water 1,500.00 11 16,500.00

Total 115,500.00

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Organizational

Management is considered as the brain of the business as it dictates the flow

of action of the business. Managerial entities are responsible for exercising

organizational resources to ensure that their organizations achieve their purposes.

The management aspect includes the tasks and responsibilities of a qualified

manager which are crucial for the success of the business, fulfillment of the legal

requirements and other pre-operating tasks needed when establishing a new

business, and ensuring the proper governance.

Objectives

1. To determine the form and capitalization of the business

2.To establish the intention and ambition of the business

3.To ensure the proper workflow of authorities

4. To identify managerial positions and responsibilities

5. To comply with legal requirements

6. To settle the policies of the business

Form of Ownership

The form of ownership that will be implemented by the business is sole

proprietorship. A sole proprietorship is when a business is owned and managed by a

single individual. This means that the business owner is solely liable for all business

transactions, profits, losses, assets, and liabilities. The owner will also be in control

for all the decision-making needed for the business. Sole proprietorship enjoys the

advantages such as ease of formation, maintenance, and dissolution with no

corporate tax and minimal legal requirements.

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Capitalization

The sole owner, will allot an amount of P10,950,000.00 from his personal

savings and profit from his other businesses. The amount will be used to cover

pre-operating expenses, accounting expenditures, operating expense, cost of goods

sold, and other forms of payment used when establishing a building

Major Expenses Amount in Peso

Lot/Land Value 7,800,000.00

Construction of Building 3,000,000.00

Other Expenses 150,000.00

Total 10,950,000.00

Principles of the business

Vision

The owner see itself to go above and beyond the standardized services for

commercial real estate industry that is fulfilling to our customers.

Mission

The Owner provide high level of service while exceeding our

customer’s expectations. The best interests of our clients will always come first

and we will

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place the clients’ concerns ahead of our own in each and every transaction, as we

are dedicated to the development of long-term client relationships

Core values

S- Suited for business owners who wishes to explore their entrepreneurial

abilities

A– Accessible location for ease of customers

F – Fair rates at affordable prices

E– Ensure that the building has up-to-date structure with the required safety

and legal necessities

Business structure

LANDLORD

TENANT/CUSTOMER TENANT/CUSTOMER TENANT/CUSTOMER

Manpower Requirements

Owner/Manager

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 Requirments:

Good communication skills and negotiations skills

Compliant to leaser's preferences and request

Must be level headed in times of critical decision making

situation

Can discriminate tenants based on their ability to pay rent and

the sustainability of their business

Job Descriptions

Will be in charge in managing the overall operations of the

business

Will be in charge of major decision making activities and

overseer of business

Will collect monthly payments on time

Will handle repairs and fixtures in certain obligations in a timely

and efficient manner

Will ensure safety requirements of the building

Will handle renovations and improvements

Will warrant minimal vacancy cycles

Will handle taxes and annual renewal of business permits used

for operations

Will take responsibility for any courses of actions of business

whether failing or succeeding

Legal Requirements

Department of Trade and Industry

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 A business name registration certificate must be acquired from the

Department of Trade and Industry with a validity of five years, the following

requirements are as follows:

 Two accomplished copies of application form of business name registration

signed by the sole proprietor

Two (2) original valid government ID with specimen signature of the sole

proprietor

Payment of registration fee (Php 500.00) and documentary stamp tax

(Php 15.00)

Business Permit And Licensing Office

Business Permit and Licensing Office (BPLO) is in charge of processing all

business permits within the Municipality. The office ensures that business

owners experience ease in doing business by implementing structured process of

applying and renewing business permits.

The acquisition of legal permits applicable by the type of business is crucial

for the pre-operation of business. The business must obtain a business permit for

new applicants to officially register in the BPLO. The following requirements are as

follows:

Fully accomplished form of New Business Permit

Applications signed by the sole proprietor

Picture of establishment and sketch of business location

Barangay Business Clearance with the signature of the officiating

officer Business Name Registration from the Department of Trade and

Industry Occupancy Permit

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 Tax Declaration

Municipal Planning and Development Office Approval

Payment for fees and permit

After obtaining the new business permit, the business must then proceed to

file for the application of business permit tax in the City Business Licensing and

Investment Promotion Office. The following requirements must be submitted to be

granted the business permit tax:

Occupancy Permit

Barangay

Clearance

Valid Fire Safety Inspection Certificate

Payment of the business tax of business activities essentially consists of sales

and services (P3000.00)

Overall payment for Regulatory Fees and Charges (P965.00) zoning fee

(P50) from the Municipal Planning and Development Office, and the Fire

Safety Inspection Fee (P307) from the municipal Fire Department

Requirements Fess and Charges

Business Tax for Business Activities P3,000.00

Essentially Consists of Sales And Services

Regulatory Fees and Charges P965.00

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Municipal Mayor's Permit and Fee on P300.00

Business

Permit Fee on Occupation of Calling P200.00

Permit Fee for Bilboard, signboard, and P150.00

Advertisement

Garbage Collection Fee P315.00

Zoning Fee P50.00

Fire Safety Inspection Fee P307.00

P4,322.00

Policies and Agreements

Policies are a set of rules to be followed by the leasers implemented by the

management in charge.

1. REQUIREMENTS. Leasers must first submit a Rental Application

Form complete with the following requirements

A. BIR Clearance

B. Two pieces of 2x2 pictures

C. Tax return

D. Signed copy of Policies and Agreements

2. DUE DATES. Rent is due on the 28th of the month. Any payment later than

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that will be considered late. Notice of payment every month will be reminded

one week prior to the due date. Two weeks of grace period will be allotted

for

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 late payments with no penalties however any late payments exceeding

the period will pay a penalty of P100.00 for every succeeding day. Early

rent payments are encouraged to avoid additional payments.

3. PERSON IN CHARGE. The Owner is the official person in charge of the

business. Payments and inquiries will be received only by her and other

authorized personnel such as her nuclear family and authorized

helpers.

If payments are handled through other authorized personnel, please ask

for verification notes.

4. RENTAL PAY. Rent may be paid through cash, checks, or fund transfers.

Official receipts will be issued after the complete payment of rent. The leasers

and rentee will receive copies for every transaction.

5. REPAIRS. The owner is liable for every repair on the base room. Any

additional appliances and furniture added by the leaser will be in his/her

responsibility. If the tenant chooses to modify the room with major renovations

such as changing floor tiles, etc, please notify the management.

6. PERSONAL LIABILITIES. Leasers must expect to pay individual water and

electric bills. Even though our management issues repair, if we deem the

leaser is responsible for any misuse or negligence of property then he/she

will be personally liable for the bill of expense. Cleanliness must also be

maintained by the tenant.

7. LEASING. Leasers are expected to lease the rental space for a minimum of

six months. After expiry of the initial lease, the issuance of renewal will be

automatically processed monthly thereafter. If the tenant wishes to vacate

the rental space, please give a 6-months-notice

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 8. RENTAL INCREASE. From time to time, market conditions may necessitate

an increase in your rent. Should this situation occur during our

management, you will be given ample notice in writing by the office.

9. EVICTIONS. Failure of payment for two straight months and any

unlawful activities executed with the leaser’s compliance and discretion

will automatically qualify for eviction. Should the management initiate

eviction proceedings and defiance of the occupant is met, legal actions will

ensue.

10. BREACH OF CONTRACT. A failure to perform any promises and terms

stated in a contract without legal excuse is a form of deviance in law. Should

this situation happen during the rental period, legal actions will be conducted

Project Time Table

Activities Duration and Time

Pre-Operating Activities

Gathering of requirements for legal permits 1 day

Application for business name registration in the Department 1 day

of Trade and Industry

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 Application for business name for new applicants in the 5 days

Business Permit and Licensing Office

Fire Inspection from the Municipal Fire Department 1 day

Zoning Inspection from the Municipal Planning and 2 days

Development

Construction of Building 6 months

Blessing of New Building 1 day

Start of Operation

Financial Feasibility

Project Capital Requiremen

The financial aspect of the feasibility study quantifies the results of the

marketing, technical, management aspect, and legal phase of the project study and

expresses in peso terms the possible outcome of operating the project. This chapter

covers the presentation of the expected financing requirements and projected

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financial statements which include the statement of financial position, statement

of financial performance, changes in equity and cash flows to assess the

profitability and feasibility of the project.

Objectives:

a. to make a realistic, complete, and conservative estimate of the total cost

to put up a project of its capital requirements,

b. to make complete, safe, and realistic projections of operating costs

and revenues

c. to determine the company’s earning performance and the soundness

and liquidity of its financial positions

d. to be able to project the feasibility of the project based on the

financial statements and ratios used.

Major Assumptions Used

The following assumptions are considered in computing the projected

financial statement of the firm:

 Revenue acquisition will be constant annually based on a fixed amount of

rent from leasers

 Repairs and maintenance expenses in the first year are zero and in the

second year are 5,648 and will remain constant for the succeeding years.

 The owner withdraws 60% of the net income every year.

 Non-current assets have a salvage value of 10% of its cost and are

depreciated using a straight-line method.

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  Taxes to be paid annually were derived based on the 1% value of the

building and permit & licenses were estimated based on the documents

believed to be annually paid.

Department of Trade and Industry P530.00

Building Permit 1,500.00

The requirement from the Municipality of Kibawe Hall

Municipal Mayor’s Permit & Free on Business 300.00

Permit Fee on Occupation of Calling 200.00

Permit fee for Billboard, sign, signboard, and 150.00

advertisement

Garbage Collection Fee 315.00

Business Activities essentially consist of sale or services 3,000.00

Zoning fee 50.00

Fire Safety Inspection Fee 307.00 4,322.00

Special Requirement for Real Estate Dealer/Commercial

Building Business

Occupancy Permit 500.00

Tax Declaration 300.00 800.00

Total P7,152.00

Page 40 of 48
 Project Cost Statement

Fixed Capital Cost

Land 7,800,000.00

Building 3,000,000.00

Office Equipment & Fixture 24,733.00

Utilities and Facilities(instalation) 31,500.00

Total 10,856,233.00

Pre-Operating Capital Cost

Permits & Licenses

DTI Permit 530.00

Building Permit 1,500.00

Municipal Hall Permit 5,122.00

Total 7,152.00

Initial Working Capital

Cash(Equity) 86,615.00

Total 86,615.00

Grand Total 10,950,000.00

5year Financial Projections

Sources of Funds

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 The proposed project will require an initial capital of Ten million nine hundred

fifty thousand pesos (₱10,950,000.00) to cover the necessary start-up cost and an

amount of cash to support daily operations

Projected Financial Statements

Statement of Financial Performance

Year 1 Year 2 Year 3 Year 4 Year 5

Service

Revenue

Rent Revenue 540,000.00 540,000.00 540,000.00 540,000.00 540,000.00

Total P540,000.00 P540,000.00 P540,000.00 P540,000.00 P540,000.00

Less:

Operating

Expenses

Taxes, License 30,000.00 34,872.00 35,484.00 36,108.24 36,744.96

& Permit

Repair & 0 5,648.00 5,648.00 5,648.00 5,648.00

Maintenance

Depreciation 77,581.54 77,581.54 77,581.54 77,581.54 77,581.54

Expense

Total P107,581.54 P118,101.54 P118,713.54 P119,337.78 P119,974.50

Operating

Expense

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Total Projected 432,418.46 421,898.46 421,286.46 420,662.22 420,025.50

Operating

Income

Total Projected P432,418.46 P421,898.46 P421,286.46 P420,662.22 P420,025.50

Net Income

Statement of Cash Flows

Pre-ope Year 1 Year 2 Year 3 Year 4 Year 5

rating

Operating

Activities

Cash 540,000. 540,000. 540,000. 540,000. 540,000.

received

from

rental

fees

Cash paid

for:

Taxes, -7,152 -30,000 -34,872 -35,484 -36,108.2 -36,744.9

License &

Permits

Repair & 0 -5,648 -5,648 -5,648 -5,648

Maintena

nce

Page 43 of 48
Net cash -7,152 510,000 499,480 498,868 498,243.7 497,607

flow

provided

by(used

in)

operating

activities

Investing Activities

Capital 10,950, 0 0 0 0 0

Contributi 000

on

Capital -259,451. -253,139. -252,771. -252,397 -252,015.3

Withdraw 076 08 88 33

al

Net cash 10,950, -259451. -253,139. -252,771. -252,397 -252,015.3

flow 000 076 08 88 33

provided

by (used

in)financin

Net cash 86,615 250,548. 246,340. 246,.96.1 245,846.4 245,591.7

flow 924 92 2 3 4

Add:Begin 0 86,615 337,163. 583,504. 829,600.9 1,075,447.

ning Cash 924 844 64 394

Balance

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Cash & P86,61 P337,163 P586,504 P829,600 P1,075,44 P1,321,.3

Cash 5.00 .924 .844 .964 7.394 9.134

Equivalen

t, Ending

Depreciation Schedule

Description Total cost Savage Value Useful Life Annual

Depreciation

Building 3,000,000.00 200,000.00 25 112,000.00

Office 24,733.00 2,473.3 5 4,451.94

Equipment &

fixtures

Office 5,648 - 5 1,129.60

Improvement

Total Annual 117,581.54

Depreciation

Financial Analysis

Payback Period

Annual Cash Flow Payback Period Expected Payback

Period

Page 45 of 48
 Investment P10,950,000 - -

Year 1 1,084,158.41 10.10

Year 2 1,062,075.65 10.31

Year 3 1,061,046.51 10.32

Year 4 1,058,994.19 10.34

Year 5 1,057,971.01 10.35 10.28

Study Conclusions

Based on the results obtained from the study, the following conclusions are drawn:

1. As the population increases, the available land for commercial

areas decreases while the demand for commercial spaces

increases.

2. After thorough research and investigation of the profitability,

acceptability an sustainability conducted by the proponents, it was

concluded that establishing a “ two storey commercial building” is

feasible.

Recommendations:

Based on the conclusions made, the following suggestions were offered to

further improve the project:

1. Further studies should analyze long-term projected income of more than

Page 46 of 48
10 years

Page 47 of 48
2. The business owner should consider the expansion of the

commercial space to maximize the land and increase the annual

income.

3. Splitting the area of one commercial space should be studied

to accommodate small-time business owners more

4. Increase rent appropriately over time to follow trends in the market.

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