PRESENTED BY: NEHA ARORA PALAK THAKKAR CHETASH MEHTA SANDEEP KR.

YADAV

INTRODUCTION 
PRODUCT:- INSTANT NOODLES  BRAND NAME:-YUMMY NOODLES  SECTOR:-FAST MOVING CONSUMER GOODS  COMPANY NAME:- YUMMY NOODLES PVT. LTD.

SHADOW PRICING 
Firstly we need to decide that whether the good is Tradable or Non-Tradable ?  Secondly we need to see that whether the good is Merit or DeMerit ?  Source of shadow prices.  How our project is going to effect following markets  Factor market:- ?  Product market:- ?

ABOUT RATIONALE 
Market Imperfection 

Externalities 

Taxes and Subsidies.  Impact on income distribution  Concern for Savings.

YUMMY S P&L A/C
ITEMS
SALES LESS COGS GROSS MARGIN OFFICE AND ADMIN ADVT AND PROM PROFIT ( 5,74,700 ) 10,45,300 ( 3,60,000 ) ( 3,40,000 ) 3,45,300 ( 5,74,700 ) 10,45,300 ( 3,60,000 ) ( 3,40,000 ) 3,45,300

INRS
16,20,000

FOREX
-

TOTAL
16,20,000

DOMESTIC RESOURCE COST
y DRC= A+B+C / (P-( Q+R+S+T)* Exchange rate
Where,
A= annual charge on domestic capital at the rate of 10% B= annual depreciation on domestic capital at 8% C= annual cost of non-traded inputs P= sales realization at international prices (exports) Q= annual charge on imported capital assets at 10% R= annual depreciation on imported capital assets at 8% S= annual cost of imported inputs T= annual cost of domestically procured, but tradable inputs Exchange rate= Rs.43.38 per US dollar Sales realization at international price (export) is estimated around 280 million

CAPITAL EMPLOYED IN THE PROJECT
ITEMS T.C ( IN lacks ) DOMESTIC CAP IMPORTED CAP LAND BUILDING PLANT T AN & MI P FIX D A T 15 10 140 5 30 45 25 40 310 15 10 40 5 20 45 05 25 165 16.5 10 100 10 20 15 145 14.5 10.4

M & P 0OP XP ONTING N I

W. .P TOTAL AP MP HA G ON AP ( 10% ) D P ON AP ( 8% )

ITEM RAW MATERIAL UTILITIES REPAIRS MAINTENANC E WAGES RENT SAL INS

TOTAL COST ( IN MILLION ) 140 20 10

NONTRADABLE 15 15 10

TRADABLE COMP 100 05 -

IMPORTED COMP 25 -

20 03 05 07 205

20 03 05 07 75

105

25

ADM EXPENSE SELL EXP TOTAL OP COST

DRC of the project 
DRC= 16.5+10+75/280- (14.5+10.4+105+25)*43.38  DRC= 35.20  Thus the domestic resource cost per USD saved is Rs 35.20,

which is lower than the present exchange rate. Hence it is desirable to manufacture the product in the country rather than import it.

TANGIBLE BENEFITS 
Low cost  Employment opportunities  Income for govt.  Hygienic Food  Inflow of Forex

INTANGIBLE BENEFITS 
Time saving  Additional food option  Enjoyment  Easy to cook

TANGIBLE COST  Diversion in wheat consumption  Increase in Consumption exp.

INTANGIBLE COST  Change in Food Habit