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Empirical investment group


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

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Empirical investment group

  1. 1. Mathematics Group Project WorkSubmitted By:•Chhitiz Shrestha•Manzil Bhattarai•Sheeba Maskay•Zhang Peng•Rahul Rai Submitted To: Mr. Ramesh Chauhan Copyright© Emperical Investment Group
  2. 2. Introduction Departmental store ◦ Retail establishment which specializes in satisfying consumers personal and residential durable goods, ◦ Certain department stores are further classified as discount department stores, ◦ Sells products including:  Apparel,  Furniture,  Home appliances,  Electronics,  Etc. Copyright© Emperical Investment Group
  3. 3. Introduction Department stores are usually part of a retail chain of many stores situated around a country or several countries, The worlds largest department store, the Shinsegae Centum City in South Korea, Copyright© Emperical Investment Group
  4. 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, Copyright© Emperical Investment Group
  5. 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, Copyright© Emperical Investment Group
  6. 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, Copyright© Emperical Investment Group
  7. 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, Copyright© Emperical Investment Group
  8. 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, Copyright© Emperical Investment Group
  9. 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. 50,000Rent 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 Copyright© Emperical Investment Group
  10. 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) Copyright© Emperical Investment Group
  11. 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. Copyright© Emperical Investment Group
  12. 12. Process of taking loan Three common stages: Loan Application Name Legal status Location Qualifications Occurrence Past dealings Dealings in other banks Function Copyright© Emperical Investment Group
  13. 13. Contd… Amount sought Proceeds Profitability Business worth Capability Security Interview Inspection and Enquires Copyright© Emperical Investment Group
  14. 14. When to start repaying thesum? 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. Copyright© Emperical Investment Group
  15. 15. Expected earning and expenditure120000001000000080000006000000 Income Expenditure40000002000000 0 1 2 3 4 5 6 7 8 9 10 Copyright© Emperical Investment Group
  16. 16. Mathematical calculationPresent Value = 4000000Annuity Due:P.V = 40, 00,000R= 9.5% P.A = 9.5/12 (per month) = 0.1791I= 0.0079N=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.) Copyright© Emperical Investment Group
  17. 17. Contd…Interest:Interest = 9.5% of Rs. 40, 00,000 = Rs. 3, 80,000So,In 1 year (total 6 years) = 63,333.33(Approx)In a month = 5,277.77 (Approx) Copyright© Emperical Investment Group
  18. 18. References: Internet ◦ ◦ ◦ Library Newspapers Magazines Copyright© Emperical Investment Group
  19. 19. Contact Information: Nepal Bank Ltd: ◦ Dharmapath, Kathmandu Tel.: 422 2397 Email: Himalayan Bank: ◦ Thamel, Kathmandu Tel.: 4227749, 4250201 Email: Nabil Bank: ◦ Tripureshwor, Kathmandu Tel.: 44117015-16 Web Address: Copyright© Emperical Investment Group
  20. 20. Thank You Copyright© Emperical Investment Group