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Financial Feasibility Study
 Gross Development Value (GDV)

Type of Total Unit Land Area Built Up Selling Selling Price/ Total GDV
Development Area/sf Price/psf Unit

Retail Shop(22’ 4 24’x 75’ 3120 RM 160.26 RM 500,000 RM

x 70’) 2,000,000

Total 4 24’x 75’ 3120 RM 160.26 RM 500,000 RM

2,000,000
Development Cost
Building Cost = ½ of Total GDV price Site Preparation Cost = Cleaning (RM 2 per sqf)
= ½ x 1,463,952.60 = RM 2,000
=1,000,000.00 = Earthwork (RM 5 per acres)
= RM 5,000

Initial Cost = 0.05% x Building Cost h. Loan = Project Duration x Current Loan Interest Rate per annum (9%) x 0.5 x Total (a - g)
= 0.05% x RM 1,000,000 = 6 months x 9% x 0.5 x RM 993,000 = RM 268,110.00
= RM 500
Unexpected Cost = 1% x Total (a - h)
Infrastructure Cost = 15% x Building Cost = 1% x RM 731,890
= 15% x RM 1,000,000 = RM 7,318.90
= RM 150,000
Profit and Risk = 20% x Gross Development Value (GDV)
Professional Cost = 6% x Building Cost = 20% x RM 2,000,000
= 6% x RM 1,000,000 = RM 400,000
= RM 60,000

Management Cost = 0.1% x Building Cost

= 0.1% x RM 1,000,000
= RM 1,000

Marketing Cost = 0.2% x Gross Development Value (GDV)

= 0.2% x RM 2,000,000
= RM 4,000
Gross Profit

Gross Profit
= Gross Development Value (GDV) - Development Cost
= RM 2,000,000 - RM 1,895,928.90
= RM 104,071.10
ROC and ROI

To complete the above calculation, the analysis in detail to measure the ability of the project is calculated through loan analysis, namely two concepts of Return
on Capital (ROC) and Return on Investment (ROI).

Gross Profit = RM 104,071.10

(-) Operation Cost = RM 52,035.55
Value of Balance = RM 52,035.55
(-) Tax (30%) = RM 15,610.67
Profit = RM 36,424.88

ROC =Profit/(Operation Cost)×100%

= 36,424.88/52,035.55×100%
= 70%
ROI = Profit/(Gross Profit)×100%
=36,424.88/104,071.10×100%
= 35%

Thus, in conclusion, the company can continue this project because the returned obtained is positive and the loan repayment can be done without any loss or
debt due to both ROC and ROI obtained more than 10% in interest rate of current loans.