This is our MBA (Justice K.S Hegde Institute of Management Nitte) Group work on Business Plan. Main intension of this slide is consideration of NPV, cost of capital while accepting projects. Here we are mainly focusing on non seasonal, local and most familiar Drinks of South Indians. Limitation of this plan is here we doesn't consider separate Warehouse cost and calculation of Bank loan & interest payment. Thank you for watching

1. Business Plan
By
Team C-7

3. Non
Sessional
Demand
Ample
Availability of
Raw martial
Less number
of key player
Ready market
for local
formers
Preferred by
all age group

4. Product Features
•Plastic
Bottles
Packaging
• 250ml
Size of the
packs
•Rs
20/-
Price
•3
months
Product
life span

5. Pricing Strategy
Rs. 4/-(Retail Margin)
Rs 5/-(Margin)
Rs11/-
(Manufacturing cost)
Rs 20/-
Raw martial
5.75/-
Processing
3.75/-
Packaging
1.50/-

6. Use of Bi- Product
.
Coconut cover
sold to users in
the village
near by, for
livestock feed.
,
The left over
cream of the
coconut will be
given to ice
cream
manufacturing
companies
,

7. Location
Quick availability
of raw martial
Miyaru,
Karkala
Easy accessibility
of Retailers

8. Equity
Owners fund 1290000
Liability
Bank loan @ 13% 1000000
Un secured loan @10% 500000
TOTAL 2790000
Asset
Land 1000000
Building 400000
Machinery & equipment 425000
Computer 60000
Refrigerator 125000
Icebox 30000
Furniture 100000
Vehicle 550000
Cash in hand 100000
TOTAL 2790000
Opening
Balance
sheet
Total Asset
2790000
Equity
Owners fund
1290000
Liability
Bank loan
1000000
Un secured loan
500000

9. 2017 2018 2019 2020 2021
Machinery 1
@15% 22500 19125 16256 13818 11745
Machinery
2@15% 33000 28050 23843 20266 17226
Machinery
3@ 15%
12000 10200 8670 7370 6264
Vehicle @ 15%
82500 70125 59606 50665 43065
Refrigerator@
15%
18750 15936 13547 11515 9789
Building
@10% 40000 36000 32400 29160 26344
Computer
@60% 36000 14400 5760 2304 922
Furniture
@10% 10000 9000 8100 7290 6561
)
Calculation of
Depreciation
(Written down
Method

10. I
108000 (
units) 129600 155520 171072 188179
Revenue from sales 1944000 2332800 2799360 3079296 3387222
Revenue from bi product 13500 16200 19440 21384 23523
Total Revenue 1957500 2349000 2818800 3100680 3410745
Expenses
Cost of material(Tender
coconut) 638000 735200 851840 921824 998810
Wages 655200 720720 792792 872071 959278
Carriage inward 27000 32400 38880 42768 47045
Preservatives 1500 1800 2160 2592 3115
Electricity 36000 39600 43200 46800 50400
Water expenses 18000 20000 22000 24000 26000
Packaging and labelling 165000 194400 233280 256608 282269
Transportation cost 88363 119167 122727 148909 170182
Promotional expense 30000 30000 30000 40000 40000
Fuel cost 15000 17160 18720 18720 20280
Registration fees 13000 0 0 0 0
Miscellaneous expense 12000 15000 18000 21000 24000
Projected
Profitability
P&L A/C

11. COGS 1699063 1925447 2173599 2395292 2621379
EBITD 258437 423553 645201 705388 789366
Less : Depreciation 254750 202836 168182 142388 121816
EBIT 3687 220717 477019 563000 667550
less: Interest on loan @ 13% 79173 79173 79173 79173 79173
less: Interest on loan from
friends @10% 29290 29290 29290 29290 29290
EBT -104776 112254 368556 454537 559087
Tax @ 35% 0 39289 128995 159088 195680
EAT -104776 72965 239561 295449 363407

12. Particulars 2017 2018 2019 2020 2021
EAT(PAT) -104776 72965 239561 295449 363407
Add: Depreciation
254750 202836 168182 142388 121816
CFAT
149974 275801 407743 437837 485223
Calculation of
CFAT

13. Cost of debt and
equity:
Weights for equity:
Owner’s
capital/investment
•1290000/2790000
=0.462
Weight for debt: (Bank loan)
Debt/investment
1000000/2790000
= 0.3584
Weights for debt (Un secured loan )
Debt/investment
=0.179

14. Overall cost of
capital (k0)
kd=0.13*0.3584+0.10
*0.179
= 0.064
Ko== 0.055+0.064
0.1194
=11.94% or 12%
Ke===0.12*0.462
0.055

15. Year CFAT PVIF @ 12% PV(12%) CPV
2017 149974
0.8929
133911.7846 133911.7846
2018 275801
0.7972 219868.5572 353780.3418
2019 407743
0.7118
290231.4674 644011.8092
2020 437837
0.6355
278245.4135 922257.2227
2021 485223
0.5674
275315.5302 1197572.753
Calculation of NPV

16. •1197573
Present Value
Of Cash Inflow
•27, 90,000
Present Value
Of Cash Inflow
•-1592427
NPV
NPV

17. Particulars 2017 2018 2019 2020 2021
Sales (units) - 20% 20% 10% 10%
Salary
- 10% 10% 10% 10%
Electricity - 10% 10% 10% 10%
Preservative - 30% 30% 30% 30%
:
Note(Assumption)

18. • We consider sales unit is increased by 20% in 2018 and 2019, further it will increase 10% annually, that is
because we assume that in the introduction stage the demand for the product will be high because of
which the product will get stability in the market therefore rest of years we assumed 10% as increase.
• Carriage cost is calculated on the basis of per load of tender coconut
• We consider 2 months as water constrain to our production so we will procure the water from outside.
• We consider Rs 1.5/- per plastic bottle as packaging and labelling expenses.
• Transportation cost is based on our sales line, we have consider 200 km per 2 day in first 2 years and
diesel price as Rs 55/- and for the rest of 2 years. Sales line increased to 300 km per two days and diesel
price is Rs 65/ and vehicle mileage is considered as 18 per litre.
•
• As our business is at the introduction stage, we will incur 30000 as a promotional expense in order to
reach the market and then there is no increase for further 2 years. Then from 4th year onwards we have
planned to increase 10000/- for actual expense based on market condition.
• Miscellaneous expense increase by 3000 annually.
• Machine1: Syrup Mixture, Machine2: Filter and carbonation, Machine3: Power Generator.

19. Conclusion
•This project may not be feasible in short run but its
earning good returns so it may work in the long run.
• We are getting NPV negative because of company
have less annual sales.

20. THANK YOU