AUTOMATIC

PHOTOCOPY
SERVICE
Presented by Group 8
 Group 8 Members

Huy Cảnh Phương Uyên Trí Nhân Kim Nguyên Vũ Tiến Hoàng Nhi Phước Hậu
 TABLE OF CONTENTS
01 INTRODUCTION 02 BREAK-EVEN 03 THE TIME VALUE
ANALYSIS OF MONEY
• About IU Photo • Price • Loan
• Revenue • Cashflow Table
• BEP • Cashflow Diagram
COMPARISON
& SELECT DEPRECIATIO
04 05 06 B-C RATIO
ALTERNATIVE N - TAX

• Alternatives • Depreciation
• Find IRR • Taxes
 ABOUT
IU PHOTO
An automatic photocopy store
 FURTHER INFOMATION

Location Customer Competitor

foot-standing photocopy
International University - IU students, lecturers and stores around the university
VNU HCMC campus staffs village
Price Photocopy/Printing Color printing
Type of paper
(VND) (VND)
A5 150 -

A4 300 800

A3 600 -
Demand 2021
Month Sheets of Paper Revenue (VND) Note
1 58,923 17,676,900 Final Exam
2 25,594 7,678,200 Start Semester 2
3 31,736 9,520,800
4 83,747 25,124,100 Midterm
5 46,406 13,921,800
6 110,642 33,192,600 Final Exam
7 25,374 7,612,200 Summer Holiday
8 17,578 5,273,400 Summer Holiday
9 60,245 18,073,500 Start Semester 1
10 27,482 8,244,600
11 85,325 25,597,500 Midterm
12 26,948 8,084,400
AVERAGE 50,000 15,000,000
SUM 600,000 180,000,000  
 Market share
In 2021:
Total revenue of our business = 180,000,000 VND
Total revenue of all photocopy stores in the University Village = 1,449,539,000 VND

𝑆𝑎𝑙𝑒𝑠 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 𝑜𝑓 𝑡h𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 180,000,000

𝑅𝑒𝑣𝑒𝑛𝑢𝑒 𝑀𝑎𝑟𝑘𝑒𝑡 𝑆h𝑎𝑟𝑒= = ≈ 12.42 %
𝑇𝑜𝑡𝑎𝑙 𝑀𝑎𝑟𝑘𝑒𝑡 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 1,449,539,000

 In the University Village, our company revenue accounts for 12.42% total
revenue of all photocopy stores.
 02

BREAK – EVEN
ANALYSIS
 Cost
We estimate a monthly expenditure of 14 000 000 VND. In the rental sector,
consumers usually deposit three months in advance.
 Because we should pay for each month in variable cost is 5,710,000 VND

 And variable cost for 1 sheet of paper is 200 VND

Price
 300 VND per sheet of paper (top 2 sides)
In 1 week, we recorded that demand is 12,500 sheets of papers
(approximately 3 boxes of A4 paper)

Revenue
 The formula used to calculate the break – even point is:
Total revenue = Total cost
pV = Cf + VCv
 Profit calculation in 2 years (104 weeks)
Break – even analysis

Profit = pV – (Cf + VCv) =

 
 THE TIME
VALUE OF
MONEY
Loan/ Cashflow Table/ Cashflow Diagram
 According to The State Bank of Vietnam, the
interest rate of our country in 2022 is 4%/year,
which means 1/3% per month.
 Loan
Capital: 40,000,0000 VND
Borrow: 30,000,000 VND
Pay off in: 12 months

Monthly Payment:
A = 30,000,000 x (A/P, 1/3%, 12) = 2,554,497.13 VND
C ashflow Table

Initial
Investment
 C ashflow Table

EOM [1] Outflow [2] Inflow [3] Cashflow = [1] – [2]

Initial Investment 59,380,000  
0 Loan 30,000,000  
Capital 40,000,000 10,620,000
Fixed cost 8,500,000  
1 Variable cost 5,710,000  
FINAL Payment 2,554,497.13  
Revenue 17,676,900 912,403
Cashflow Diagram
 COMPARISON
AND SELECT
ALTERNATIVES
 “The objective of this part is to evaluate correctly
capital investment alternatives when the time value
of money is a key influence.”
 A LT E R N AT I V E S
A BUYBACK C
TWO OLD
MACHINES

RENT TWO BUY TWO MACHINES

AND SELL
MACHINES
Sell them after 5 years
at
B 35,000,000 VND
Apply the incremental investment analysis to
compare and select the best alternative for our
company with MARR = 4% in 2022 and study
period is 5 years.
 The capital investment and the annual expenses of each alternative

Unit: VND A B C

Capital investment 23,380,000 59,380,000 92,380,000

Annual expenses 142,500,000 138,500,000 138,500,000

Useful life (years) 5 5 5

Market value (at the end of

0 0 35,000,000
life)
The table of cash flow of Δ (B – A) and using incremental investment
analysis with A is the base:

Year Δ (B – A)

0 -36,000,000

15 4,000,000
 Find IRR (By using Present Worth)

Let: PW = 0

Present Worth:
PW = 0 = -36,000,000 + 4,000,000 (A/P, iΔ%, 5)

By using trial and error

iΔ = -16.86% < MARR
The table of cash flow of Δ (C – A) and using incremental
investment analysis with A is the base:

Year Δ (C – A)

0 -115,760,000

14 4,000,000

5 39,000,000
 Find IRR (By using Present Worth)

Let: PW = 0

Present Worth:
PW = 0 = -115,760,000 + 4,000,000 (P/A, i%, 4) + 39,000,000 (P/F, i%, 5)

By using trial and error

iΔ = -15.56% < MARR

Alternative A should be selected.

Rent two machines is the best alternative.

Depreciation -
Tax
 Depreciation
Alternative B: Buyback two photocopy machines
EOY, k r d BV
0 36,000,000
1 0.1429 5,144,400 30,855,600
2 0.2449 8,816,400 22,039,200
3 0.1749 6,296,400 15,742,800
Applying the Modified Accelerated Cost 4 0.1249 4,496,400 11,246,400
Recovery System (MACRS) method, 5 0.0893 3,214,800 8,031,600
particularly General Depreciation System
(GDS), the photocopy machine has a class
Alternative C: Buy two new photocopy machines
life of 10 years and a GDS of 7 years. EOY, k r d BV
0 96,000,000
1 0.1429 13,718,400 82,281,600
2 0.2449 23,510,400 58,771,200
3 0.1749 16,790,400 41,980,800
4 0.1249 11,990,400 29,990,400
5 0.0893 8,572,800 21,417,600
 Ta x e s
4 basic taxes: Business-license tax, Corporate income tax, (E) Personal
= (A) + income tax, and
(A)
(B) (C) = (A) -(B) (D) (D)
=(D)
-t(C)
(E)
(E)
(D)== (A)
(A) ++
Value-added
EOY, (A)tax.
Before-Tax (B) (C) ==-t(C)
-t(C) Business- Corporate
(B)
Depreciation (C) ==(A)
(A)--(B)
Taxable (B)
Cash Flow for
CashFlow
Flow
(D)
(D)
After-Tax Business-
Business-
Corporate
EOY,
k Before-Tax
Cash Flow Depreciation Taxable Cash
IncomeIncome After-Tax License Tax Corporate
Income Tax
Income
Depreciation
Deduction Taxable
Income Income
(TI) forTax
Income CashAfter-Tax
Flow License
License Tax
k Cash Flow
Business-license tax: Deduction
(BTCF) 2 M i l l i o n V(TI)
Deduction NĐ
(TI) for Income CashFlow
Flow Income
TaxTax
Tax Cash
(ATCF) Tax
(BTCF) Tax (ATCF)
0 59,380,000 - - - (ATCF)
59,380,000 - -
The
1 tax -20,658,001
ratio: 2 0 % - - - - - -
00 0
92,380,000 -- -- -- 0
92,380,000 -- --
Assume:
2
11 Net loss
41,500,000
-67,633,979
-20,658,001 would --not be involved
8,816,400
-- in the tax calculation.
32,683,600 -6,536,720
--
34,963,280
--
2,000,000
--
-6,536,720
--
223 37,500,000
41,500,000
41,500,000 -
23,510,400
6,296,400 37,500,000 -7,040,720
17,989,600
35,203,600 -7,500,000 34,459,280
-3,597,920 30,000,000 2,000,000
37,902,080 2,000,000
2,000,000 -7,500,000
-3,597,920
-7,040,720
Formula:
33 37,500,000
41,500,000 -
16,790,400 37,500,000
24,709,600 -7,500,000
-4,941,920 30,000,000 2,000,000
36,558,080 2,000,000 -7,500,000
-4,941,920
44 41,500,000
37,500,000 4,496,400 37,003,600 -7,400,720 34,099,280 2,000,000 -7,400,720
Corporate
4 income tax
41,500,000 =- (gross income
11,990,400
37,500,000
29,509,600
-7,500,000
- all expense
-5,901,920except
30,000,000 2,000,000
capital -2,000,000
35,598,080
-7,500,000
depreciation
-5,901,920
5 37,500,000 - 37,500,000 -7,500,000 30,000,000 2,000,000 -7,500,000
deductions)
55 × 20%. 8,572,800
41,500,000
76,500,000 3,214,800 38,285,200
67,927,200 -7,657,040
-13,585,440 33,842,960
62,914,560 2,000,000
2,000,000 -7,657,040
-13,585,440
5 - - - - - - -
55 22,000,000
8,000,000 -- 582,400
-31,600 -116,480
6,320 21,883,520
6,320 -- --
PW (3.2%) = npv(3.2%, atcf1-5) + atcf0

PP W
W((33. .22%
%)) B
C = 21 48 62 , 53A63 40 , 84 06 54 . 68 47 =
107,540,382.124872
B-C Ratio
Base on the table we got from part 4, we can have PW cost for each alternative.

Unit: VND A B C
Capital investment 23,380,000 59,380,000 92,380,000
Annual expenses 142,500,000 138,500,000 138,500,000
Useful life (years) 5 5 5
Market value (at the end of life) 0 8,000,000 22,000,000

PW = 23,380,000 + 142,500,000(P/A, 4%, 5) - 0(P/F, 4%, 5) = 657,761,500

A

PW = 59,380,000 + 138,500,000(P/A, 4%, 5) – 8,000,000(P/F, 4%, 5) = 669,381,976

B

PWc= 92,380,000 + 138,500,000(P/A, 4%, 5)  - 22,000,000(P/F, 4%, 5) = 690,874,996

 PW benefit
Alt A Alt B Alt C

Revenue 180,000,000 180,000,000 180,000,000

Potential of diversifying
10,000,000 10,000,000 10,000,000
service in IU

Job opportunity 4,000,000 4,000,000 4,000,000

Customer satisfaction
1,000,000 1,200,000 1,500,000
(time service reduction)

Improvement of IU
700,000 700,000 700,000
image

196,200,000
Total 195,700,000 195,900,000
 PW BENEFIT OF EACH
ALTERNATIVE
Alter A
195,700,000(P/A, 4%, 5)= 871,217,260

Alter B
195,900,000(P/A, 4%, 5)= 872,107,620

Alter C
196,200,000(P/A, 4%, 5)= 873,443,160
 Calculate the B-C Ration
Alt A:

B-C Ratio: 871,217,260/657,761,500= 1.32

Alt B:​
All three alternatives are
B-C Ratio: 872,107,620/669,381,976= 1.30
attractive.

Alt C:​

B-C Ratio: 873,443,160/690,874,996= 1.26

 Delta (B-A) Delta (C-A)
Capital investment 36,000,000 69,000,000
Annual expenses -4,000,000 -4,000,000
Useful life (years) 5 5
Market value (at the end of life) 8,000,000 22,000,000

INCREMENTAL ANALYSIS
PW(4%)-cost
• Delta (B-A)= 11,620,476 
• Delta (C-A)= 33,114,496  
PW(4%)-benefit
• Delta (B-A)= 890,360 
Hence, both B and C cannot be the base
• Delta (C-A)=  2,225,900 so alternative A will be selected.
B-C Ratio:
• Delta (B-A)= 0.07<1
• Delta (C-A)= 0.06<1
 CONCLUSION

Pay back 55 weeks.

Loan 30M, MARR 4%, 1 year with 2.5M per month.

Earn 65M after 2 years.

Choose Alternative A
instead of Alternative C
 REFERENCES
Máy photocopy Ricoh cũ. (2022). Retrieved from Quang Minh Corp:
https://quangminh.vn/may-photocopy-ricoh-cu.html
Mức nộp thuế môn bài năm 2022. (2022). Retrieved from Viet Tan Law: https://luatvietan.vn/
Mức thuế suất thu nhập doanh nghiệp năm 2022. (2022). Retrieved from Viet Tan Law:
https://luatvietan.vn/
Vietnam Interest Rate. (Updated 2022). Retrieved from Trading Economics:
https://tradingeconomics.com/vietnam/interest-rate
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling. (2015). Engineering Economy
Sixteenth Edition. Pearson Higher Education.
 Magnetic
card reader
RICOH Aficio MP SBC-650
3555SP + DF. Black 01 03
and White Copier

Ricoh Aficio
02 04 Computer set
MP C4503.
Color Copier
THANK YOU!