Assignment, Business Mathematics, BBA-BI 1st semester, Ace Institute of Management

1. Mathematics Group
Project Work
Submitted By:
•Chhitiz Shrestha
•Manzil Bhattarai
•Sheeba Maskay
•Zhang Peng
•Rahul Rai Submitted To:
Mr. Ramesh Chauhan
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2. Introduction
 Departmental store
◦ Retail establishment which specializes in satisfying
consumer's personal and residential durable goods,
◦ Certain department stores are further classified as
discount department stores,
◦ Sells products including:
 Apparel,
 Furniture,
 Home appliances,
 Electronics,
 Etc.
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3. Introduction
 Department stores are usually part of a retail
chain of many stores situated around a country
or several countries,
 The world's largest department store, the
Shinsegae Centum City in South Korea,
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4. Plan after taking the loan
 Note: This report is based on the assumption
that the financial situation in the related banks
is sound and suitable. Thus we are allowed to
borrow the required sum of money without any
sort of difficulty.
 Open a medium sized departmental store in the
name of Empirical Investment Group (EIG),
 Require a loan of about 40 lakhs,
 Plan to invest 60 lakhs from our personal
funds,
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5. Contd...
 Assumed that it would take us of about 3
months to gather the capital,
 Allocation of the capital starts from the 1st
week of 2010,
 Necessary funds will be allocated within
the first week of April 2010,
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6. Contd...
 Locate a suitable place at Baneshwor,
 Rs. 50 thousand is agreed as advance and
we would require paying a monthly rent
of Rs. 1.5 lakhs for the tenure of 10 years,
 Plan to import goods from abroad as well,
 Contractual costs Rs. 50,000
 Task to finish within the second week of
April,
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7. Contd…
 Rs. 12 lakhs each from five members,
 Joint capital of Rs. 40 lakhs (loan amount) +
60 lakhs (invested amount) = Rs. 1 crore
(total capital),
 Also need to buy racks and shelves to display
the goods,
 Separated the budget of Rs. 5 lakh for buying
these items,
 Rs. 25 lakhs would be spent for the goods
that are to be sold in our store,
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8. Contd…
 Number of employees should not be
greater than 17,
 Hiring of staffs would be complete within
the end of April or so and cost us Rs. 50
thousand (Approx.)
 Would be ready to commence our
business form the first week of May 2010.
Note: We assured a piece of land worth
Rs. 55 lakhs as collateral,
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9. Tabular Representation
Expenses Amount
Rent advance Rs. 50,000
Contractual Negotiations Rs. 50,000
Racks/Shelves Rs. 5,00,000
Goods Rs. 25,00,000
Employee Hiring Expenses Rs. 50,000
Rent till April (minus advance 50,000) Rs. 4,00,000
Salary till April (from March) Rs. 1,75,000
Petty Expenses Rs.1,00,000
Total Rs. 38,25,000
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10. Graphical Representation
Expenses till May 1st 2010
Rent advance
Contractual
Negotiations
Racks/Shelves
Goods
Employee Hiring
Expenses
Rent till April (minus
advance 50,000)
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11. Why Himalayan Bank ltd?
 Aims to help establishment, growth and
expansion of small and medium sized
enterprises,
 Business houses coming from industrial, trading
and service sector can avail of to meet their
short-term and long-term financing needs,
 Interest rate – 9.5% per annum,
 Other banks considered
◦ Nabil Bank
◦ Nepal Bank Ltd.
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12. Process of taking loan
 Three common stages:
 Loan Application
 Name
 Legal status
 Location
 Qualifications
 Occurrence
 Past dealings
 Dealings in other banks
 Function
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13. Contd…
 Amount sought
 Proceeds
 Profitability
 Business worth
 Capability
 Security
 Interview
 Inspection and Enquires
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14. When to start repaying the
sum?
 About 3 to 4 months to set up the store,
 Thus we would need start to repay the
sum from the fifth month,
 But we start to pay from the first month
 We use separate personal funds to support
the repaying of the borrowed sum,
 Until the investment starts to yield income
of its own.
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15. Expected earning and
expenditure
12000000
10000000
8000000
6000000 Income
Expenditure
4000000
2000000
0
1 2 3 4 5 6 7 8 9 10
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16. Mathematical calculation
Present Value = 4000000
Annuity Due:
P.V = 40, 00,000
R= 9.5% P.A = 9.5/12 (per month) = 0.1791
I= 0.0079
N=72 [6 12 (in months)]
P.V = P / I [ 1 – {1 / ( 1 + I ) ^n } ]
4000000 = P / 0.0097 [ 1 – { 1 / (1.0097) ^72} ]
P = 73058.745 (Approx.)
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17. Contd…
Interest:
Interest = 9.5% of Rs. 40, 00,000 = Rs. 3, 80,000
So,
In 1 year (total 6 years) = 63,333.33(Approx)
In a month = 5,277.77 (Approx)
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18. References:
 Internet
◦ www.google.com
◦ www.wikipedia.com
◦ www.answers.com
 Library
 Newspapers
 Magazines
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19. Contact Information:
 Nepal Bank Ltd:
◦ Dharmapath, Kathmandu
Tel.: 422 2397 Email: info@nepalbank.com.np
 Himalayan Bank:
◦ Thamel, Kathmandu
Tel.: 4227749, 4250201 Email:
himal@himalayanbank.com
 Nabil Bank:
◦ Tripureshwor, Kathmandu
Tel.: 44117015-16 Web Address:
www.nabilbank.com
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20. Thank You
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