Walmale digital business

Project feasibility study
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“By Guta Mengesha”
PROJECT FEASIBILITY STUDY ON ON ESTABLISHMENT OF
DIGITAL MARKET IN JIMMA
Walmale Marketing networks PLC
Prepared by Guta Mengesha
Walmale Marketing networks PLC
Walmale Marketing networks
PROJECT FEASIBILITY STUDY
July2020
Walmale Marketing Network PLC
CEO
Mrs. Sinaf Bona
Jimma
Phone:
Email.
www.//http.
Seminar in Project Management and Finance (MPMF 712)
By Guta Mengesha
ID.WM1479/11

Walmale Network marketing Plc
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TABLE OF CONTENTS
Executive Summary.................................................................................................3
Company Description..............................................................................................4
Product or Service ...................................................................................................3
Market Analysis.......................................................................................................4
Strategy and Implementation .................................................................................7
Management Team ..................................................................................................9
Financial Analysis....................................................................................................12

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EXECUTIVE SUMMARY
One of growing business in cities are digital marketing. People prefer to submit, call and collect the item
they need at their doors with out up and down from specialised service providers. The demand for
household good is high and it minimize the time the user wests in searching, procuring and transporting
to home or business locations .It also saves space for business operators.
Walmale Marketing networks is a new digital business, which specializes in delivery of consumer goods.
Walmale marketing network will provide numerous products and services for this market including:
Consumer goods , house hold supplies, small construction works, maintenance and service.
Following the out brake COVID-19 pandemic the number of movement is restricted and challenging.
Thus, delivery of consumer goods and agricultural products to hotel owners, business organizations and
households is demanding one during this time and beyond.
The business is located in Jimma and will focus on providing internet based solutions for local business
within the area, as well as surround. Walmale marketing network is an retail business and service
business. There is a community in the Jimma that has not been exposed to professional , because many
similar businesses are located in larger cities. Walmale Network marketing is aware that Jimma is an
untapped resource, and would like to make online marketing available to businesses for use in
promotional and informational materials.
Delivering household needs are unique features of this business. Walmale Network market will offer
various optimization services to fit each customer’s preferences. Our online services will be provided in a
more personalized and individual way through telephone call also.
This capital will be secured from two major sources: Bank loan for One million two hundred sixty four
thousand.
Company has already purchased some necessary pieces of equipment and will use the loan and money on
hand to acquire additional equipment and inventory, and for other start-up expenses.
Economic indicators of the project:
Total investment requirements 2,000,000.00
Internal Rate of Return 7.8%
Pay-back period 4.14 years
Net present value 280,014
Job opportunity provided by the project 10

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PROJECT OBJECTIVES
 To provide a consumer and customized goods “Asbeza” and readymade foods to community
 To provide job opportunities for unemployed citizens in the govern ate and improve the overall
economic situation of the town
 To achieve profitable return to the project owner.
 To facilitate agricultural product delivery by minimizing its perishability.
 To improve the e-commerce business sector in Jimma to raise awareness of community
 Payment of government tax so that supporting local government in funding other public benefiting
projects.
 To provide a 24 hour service with supportive portal
1. COMPANY DESCRIPTION
Walmale Network marketing is a local small business which will provide quality digital and mobile
application packages and services to everyone from individuals to businesses. Walmale Network
marketing will help individuals and businesses in a way that will complement their products and services.
Walmale Network marketing will optimize and sell its own products, packages and services. This
business will provide its customers with quality promotional materials and help small businesses establish
their own marketing strategies online.
Walmale Network marketing will registered as a business entity in Jimma zone the state of Oromia and
Ethiopia on from July 2020.
Walmale Network marketing is 100% owned and operated by owners.
2. PRODUCTS AND SERVICES
Walmale Network marketing will be providing delivery of consumer goods, agricultural products like
vegetables, fruits, foods and drinking items other customized need based on customer needs.
These services will include :
 A customized digital and on call delivery service of consumer goods
 Procurement services
 Repair and maintenance
 Small construction works
Walmale Network marketing will provide customers with customized service for all items the business
and house hold shall procure in an effort to increase save their time , focus on their main jobs and help

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build their customer base right here in the Jimma town and surrounding area. Based on my level of
experience and expertise, the areas I have identified as potential target markets include:
 Digital and on telephone marketing supportive portal with many options
The unique point of difference between Walmale Network marketing and competitors in the area is that
we will :
 Walmale will deliver any goods, service, and construction works up to birr five thousand at once.
In the future, Walmale Network marketing may expand its services to other areas of online business such
as : To governmental and Non-governmental organizations.
3. MARKET ANALYSIS
PRODUCT / SERVICE
Walmale Network marketing products and services are unique because of customized delivery after
purchasing at our cost, personalized service, and competitive prices. Walmale Network marketing strives
to be viewed as being professional and as providing high-quality work. Walmale Network marketing on
line services will also be completed in a timelier manner than that of our competitors’ and delivered to
customers more quickly, due to the personalized nature of our business.
TARGET MARKET
Walmale Network marketing will serve businesses in the Jimma. Most of these will either be small
businesses, hotels, Cafeterias, households or individuals that just don’t have time to purchase goods
from the market or want to focus on their business domains.
Research has shown that there are more small businesses now than ever before. Also, more and more
companies are outsourcing their search digital and on call and marketing activities. These trends are
expected to continue in the foreseeable future. Walmale Network marketing goal is to capture 20-40% of
the market in its two years of its operation.
MARKET NEED
Walmale Network marketing satisfies the market need for a local business that will work on a more
personal basis with the local community. Walmale Network marketing will be supplying any goods,
service and simple constriction related works, and other completed foods. Walmale Network marketing
will be a supplier of search marketing and any items procured from external suppliers and services with
competitive prices, as well as originality and convenience to the individual needs. Walmale Network
marketing services will be available to any person or business that has cell phone, a web presence need.

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For example, small businesses that need items to be procured for them or individuals who need delivery
of consumer and household stationary and other agricultural products are target market. Currently, the
market need is being filled by vehicle owners by delivery of agricultural products with much higher fees
and charges that we intend to offer. Yet customer has to go physically in market site to collect any goods.
COMPETITORS
The production quality is good and this business can handle big or small jobs. Marketing techniques
include FM advertising, Facebook, Mega phone promotion, Telephone call, Internet, and the yellow
pages. Bajaj and small vehicle has a good central location but their services are not customized and not
cover all the requirements customer needs . This competitor caters to big businesses mostly. Their overall
market share is 20%, but they possess only 5% of Walmale Network marketing market share.
COMPETITIVE EDGE
An advantage that Walmale Network marketing has over its competitors is that it is a small business;
therefore, it is able to give more personal attention to each customer’s needs. Customers will be dealing
directly with the owner and not just a company employee or representative. Walmale Network marketing
also has much less cost in terms of overheads, inventory and equipment. This will allow a much more
competitive rate for our customer base.
Walmale Network marketing will stay on top of progress in the field by assessing need of customers,
monitoring competitors action, attending requirements , and upgrading to top-of-the-line equipment in
order to produce the newest technologies available.
LOCATION
The location of the facility is important because it will be near potential customers. We hope that this will
help Walmale Network marketing to gain an additional advantage over the competition and provide
greater customer satisfaction.
INDUSTRY TRENDS
New technology is introduced constantly to the digital and on call industry. Walmale Network marketing
plans to attend trade shows, read industry publications, and observe competitors in order to follow trends
in the industry. At this time, the industry is very successful and 10-15% annual growth is planned to
continue through the next five years. The major unique to digital business is accessibility that minimize
time and space.

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METHODS OF DISTRIBUTION
Once requested, our staff members list down their need and supply items or service locally available in
Jimma up to next day and for items not in Jimma up to four days maximum. If required Walmale
Network marketing may provide onsite training to clients locally.
ADVERTISING AND PROMOTION
Walmale Network marketing will initially advertise through FM radio , Mega phone advertising , local
business publications, and by the word-of-mouth satisfaction of customers. Promotional items will
emphasize the cost effectiveness and professional capabilities of Walmale Network marketing
Walmale Network marketing will have a fee schedule for the assorted products and services that
Walmale Network marketing . The prices will be competitive within the local area and our packages offer
our clients a range of cost effective options. Walmale Network marketing is able to charge less than his
competitors and still make a profit due to his low overhead and lower personnel costs. Expected sales for
Year 1 are Eight hundred thousand, for Year 2 are one million six hundred thousand , and for Year 3 are
One million nine hundred .
4. STRATEGY AND IMPLEMENTATION
MARKETING
Primary marketing and business implementation strategies include the following is direct marketing
CLIENT MANAGEMENT DATABASE
Automated database technologies will be utilized in order to establish a network of client tell and
referrers. This will help solidify our relationship with both existing and new customers by means of direct
marketing including:
 Digital
 Direct mail
 SMS(Chat room)
 Telegrams
 Phone calls
Strong relationships with affiliates and key individuals and organizations will be identified and acted
upon over time. We currently have established relationships with hosting companies, small local business,
web design firms, and agents, other importers and distributes in Addis Ababa We see teaming with these

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organizations as an integral part of the overall importance to our growth and ongoing success.
ADVERTISING
Traditional advertising methods, including the local media advertising, personal selling , will be
undertaken in the first two months of operation. We are also investigating other cost effective advertising
strategies such as mega phone advertising and on vehicle promotions.
Long term advertising methods will include :leaflet , brushers and posters in strategic areas
DIGITAL MARKETING
Walmale Network marketing main business website will be used in conjunction with the methods listed
above to demonstrate our professionalism and expertise within the digital industry. Walmale Network
marketing will be proactively involved in promoting the business online, particularly via printed business
literature we distribute, search engines, mobile apps and outsourcing sites such as google.
PRICING AND FEE STRUCTURE
Walmale Network marketing will adopt 4 basic fee structures. These will be implemented in accordance
with continual measurable feedback and client survey responses Walmale Network marketing has found
the best pricing strategies that work most effectively are as follows:
1. Per Kilometer: Clients will be charged total fee set at an agreed price for a period of time
as set out within the contract.
2. Per order/Per kilogram: Fixed pricing per project, based upon the amount of work and time
involved, as well as expenses incurred.
3. Per agreement: Applied for maintenance and small tasks services.
4. For maintenance and service items cost covered by clients
FINANCIAL PROJECTIONS
Walmale Network marketing has estimated that profits of approximately birr 422,276.00 should be
achievable by July 2021. This takes into account the number of proposals already submitted to
prospective clients’ projects and assumes payment of 33% of the estimated total charge for each project in
advance.

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MATERIALS
S.N Description Quantity Unit price Cost
1 Suzuki mini-vehicle 1 120,000.00 120,0000.00
2 Motor cycle 2 80,000.00 160,000.00
3 Laptop computers 4 30,000.00 120,000.00
4 Furniture 8 2,000.00 16,000.00
8 Coat hunger 1 2,000.00 2,000.00
9 Land telephone 2 500.00 1,000.00
10 Smart phone 2 7,000.00 14,000.00
Total 433,000.00
UTILITIES
The utilities required for the service provision are electricity for power, ICT facility and, vehicle
maintenance and service, fuel, mobile airtime etc.
S.N Description Unit Qty. Cost in ETB.
1 Office and warehouse rent Month 10,000 120,000
2 Telecommunication and mobile air time Bill - 20,000
3 Maintenance and repair Pcs 50,000
4 Motor oil Lit 5,000
5 Diesel Lit 18,000
Total 213,000
5. MANAGEMENT TEAM
LEGAL FORM OF THE COMPANY AND MANAGEMENT
Walmale marketing network is a newly established private limited company (PLC) owned by an
individual investors. The company has its chief executive officer who will be appointed by its skill
and professional requirement. She suggests policies and plans, managing the overall work in the
business, follow-up implementation of plans and programs in accordance with the goals and

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objectives of the company. She also oversees the management of financial and administrative in the
business in line with the instructions, facilitates the training systems to increase workers skills, in
addition to the development of procedures and ensures the requirements of occupational and public
safety and health.0
Ownership and control: Chief executive officer is the a delegate of the owners and the general
responsible person for the business
Limited Liability: the obvious merit of limited liability companies are the financial securities that
comes from the business. The company only liable for the debt it accrues according to the level of the
investment.
ABOUT THE OWNERS
Walmale Network marketing Plc is the final achievement of a deep seated interest of telephone and
digital marketing, and a desire to continue this work as a career for Mr.Sinaf. She has ready to begin
her own business as an food delivery and she will join her four friends for additional equity.
Mrs. Sinaf Bona has over 20 years of experience in commodity and hotel service. As the primary
designer at Walmale Network marketing she will bring expertise to the area of Jimma.
MANAGEMENT SETUP
The owners will be the sole person involved in the start-up of the business. She will manage a
business yet contracting with others until her customer base and production levels expand to a point
where additional help is necessary.
Mrs.Sinaf will keep up with the ever-changing network industry by attending training workshops,
seminars, etc. She plans to continue her education and monitor trends in these ways.
Mrs. Sinaf has graduated with an BA Degree in Commerce and she has taken a certificate in ICT and
online business management from number of institute She has twenty years of experience as an
accountant, sales, supply chain officer, logistic coordinator and programme manager consultant with a
companies and NGO’s in Ethiopia. Mrs. Sinaf has created an extensive portfolio of her past work
which is available for viewing.

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CONSULTANTS
While trying to grow the business, Mrs. Sinaf will depend on the consultants at the consultancy
institution and location to give her advice. She will also be contacting Mr. Yasin Ababor for legal advice
services. Mr Yasin will be a legal adviser of the company and the fee payment for him shall be
determined on annual meeting.
OTHER STAFF MEMBERS
There are about 11 staff: one ICT staff , two motorists, one vehicle driver and two assistance drivers,
one procurement officer, Dispatcher, accountant , office admin and CEO.
ORGANIZATIONAL STRUCTURE
MAN POWER
The project requires both skilled and unskilled labor forces primarily from Jimma town as well as from
other areas especially for professional recruitment to select those professionals who fulfills the required
experience or criteria.
The list of manpower and the annual cost of labor is indicated in Table 6.1 below.
Table 6.2. Manpower requirement and annual labor cost.
S/No. Description No. of Persons Monthly Salary (Birr) Annual Salary (Birr)
1 Chief Executive Officer 1 14000 168,000
2 ICT Manager 1 10000 120000

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3 Procurement Manager 1 10000 120000
4 Accountant 1 6000 72,000
5 Driver 1 4000 48,000
6 Assistant drivers 2 3000 72,000
7 Motorist 2 3334 40,008
8 Office admin 1 2500 30,000
9 Dispatcher 1 2500 30,000
Total 10 700,008.00
PROJECT SCHEDULE
S/
N
Work description Duration Supervision Remark
1
Pre–kickoff
Legal works and licensing Jul.-./2020 
Software. or Application /
development
August 2020 
A. Domain Analysis and
Development planning
(August 1-10/2020)

B. Requirement
specification
(August11-20/2020)

C. Software design (August 20-25/2020)

D. Implementation and
Testing
(August 26-30/2020)

Selecting suppliers and sign of
frame work purchase agreement
Sep.2020 
2
Implantation
Period
Office and warehouse rent Oct. 2020 
Handover and test of software Nov 2020 
3 Operation
period
Furniture procurement and HR
selection work
Nov-Dec.2020 

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6. FINANCIAL ANALYSIS
The Financial part illustrates all the assumptions which were used when we have developed the study
including project expenses related to capital expenditures, operating expenses ( Fixed and Variable costs)
followed by illustrating project revenues.
Assumptions:
 The project span time is 10 years. With phase I and phase II
 Income tax on the net project income is 30% during the life time of the project.
 Project working capital has been estimated and added to project cash outflows at the beginning of
the project.
 The project starting time is January 2021, and the last year of study is 2025.
This section presents an economic model that realistically puts forth the basic financial assumptions of
Walmale Network marketing. The model is based upon conservative assumptions and demonstrates
Walmale Network marketing can be profitable in its first year of operation.
The economic model shows a need for an additional Birr 1,264,000.00 to launch the company. Walmale
Network marketing capital needs are largely for inventory, equipment, working capital, and marketing.
SOURCES OF FUNDS
Owner’s Equity…………………………………………………………Birr 656,000.00
(Equipment Already Purchased and cash)………………………………… 80,000.00
Bank Loan ………………………………………………………………… 1,264,000.00
TOTAL 2,000,000.00
The following pages present cash flows, profit and loss statements and other financial information
projections for three years.
Project working times
Number of days/year 360
Number of months /year 12
Number of weeks /year 52
Working days/week 7
Number of working hours/day 8

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EXCHANGE RATE
American dollar (1$US) 34.58 ETB
All values are expressed in Ethiopian Birr.
Source of finance 63.2 % equity 36.8% loan
Bank interest 10 %
Discount cash flow 6 %
Treasury balancing system daily
Repair and maintenance 5% of equipment and capital cost.
Depreciation straight line and all asset useful is 5 years
Purchase threshold less than birr 5000.00 to procurement coordinator and above need consulting of CEO
yet all approval is made by CEO.
ICT item specification confirmed by ICT coordinator prior to acquiring.
All sale are cash sale and no credit sales for first year of operation
No advance for any procurement
INITIAL INVESTMENT COST
The project is financed by owner’s equity and bank loan which values 63.20% and 36.80% respectively.
The bank loan will be settled in 2 years starting from the project operation period.
The organization gives its service for rural dwellers, business organizations and other citizens of who
lives Jimma town. The expected revenue from the business and other services is 1,890,000 for the first
year and will increases to 3,040,125 at the end of 5th year of the first operation period.
CAPITAL INVESTMENT
The cost of the project is estimated to be birr 2,000,000.00 which is needed to invest at the beginning of
the project operation.
Table 9.1 Investment cost
Description Unit Qty Unit price Total amount
1. ICT equipment and infrastructure
Software development No 1 15,000 15,000
Laptop computers Pcs 4 20,000 60,000
Land telecommunication Pcs 2 500 1,000
Mobile apparatus(Smart phone) Pcs 2 7,000 14,000

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Sub total 62,500 90,000
I. Office furniture
Furniture Pcs 8 2,000.00 16,000.00
ICT infrastructure Pcs 1 2,000.00 2,000.00
Sub total 4,000.00 18,000.00
II. Vehicles
Vehicle Pcs 1 120,000.00 120,000.00
Motor cycle Pcs 2 80,000.00 160,000.00
Sub total 200,000.00 280,000.00
Total 388,000.00
Contingency (10%) 38,800.00
Grand total 388,800.00
Table 9.2 Fuel and lubricants
Description Unit Qty Unit price Total amount
Motor oil Kg 10 300 3,000.00
Diesel Lit 8 1000 8,000.00
Spare parts Pcs 5 1200 6,000.00
Total 17,000.00
Table 9.3.Working capital Determination
Description Amount
Pre-investment costs(annually) 15,000
General administrative expenses(quarterly) 1,250
Salaries and wages (Quarterly) 175,002
Utilities (quarterly) 1,000
Government expenses (yearly) 1,000
Repair and maintenance (Quarterly) 7,500
Insurance (annually) 15,000

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Other expenses 1,000
Total 216,752.00
Table 9.4.Operating costs
Description Amount
Administrative expenses 5,000
Direct salaries 700,008
Utilities expenses 4,000
Repair and maintenance 30,000
Insurance 15,000
Fuel and lubricants 17,000
Other expenses 1,000
Total 772,008
PROJECT BACKGROUND
Name of proposed Business: Walmale Marketing Network PLC
Nature of the business: Digital / telephone business
Type of Business organization: Private Limited company
Location of the Business: Ethiopia, Oromia, Jimma town
SOURCE OF FUND (FINANCING)
The financing structure of the project consists of loans and Equity. The investment cost of this project is
estimated at 2,000,000.00 ETB where 63.2% of the project will be financed through loans 763,000.00 and
the remaining (36.8%) through (Equity) 1,264,000.00 ETB
The following table 9.5. Summarizes the general structure of the required financing:
Source of funds Amount Percentage
Equity 736,000.00 36.8%
Loans 1,264,000.00 63.2%
Total 2,000,000.00 100%

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TYPES OF BUSINESS ORGANIZATION
The proposed project will going to adopt private limited company type. As per the Ethiopian commercial
low number of shareholder can range from 2 to 50 and with minimum capital birr 15,000.00
Table 9.6. Depreciation cost
S/N Description Original value Depreciation rate Annual depreciation
1 Computers and ICT items 60,000.00 20% 12,00.000
2 Furniture 16,000.00 25% 4,000.00
3 Motor cycle 80,000.00 20% 16,000.00
4 Vehicle 120,000.00 10% 12,000.00
Total depreciation 276,000.00 44,000.00
FINANCIAL ASSUMPTIONS
SELLING PRICE
Sale of consumer goods per transaction birr 100 per order plus trip per KG of birr 10 total of Birr 110
Other support service charge for items from Addis birr 200/ per transaction
REVENUE
Consumer items --------9000kg x 110birr =Birr 990, 000.00
Other orders ------------ 4500 orders x 200 birr = Birr 900,000.00
Assumed total revenue = birr 1,890,000 on the first year of transitions.

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PROJECTED REVENUE
Walmale Network Marketing PLC
PROJECT INCOME STATEMENT
FOR THE YEAR (2021-2025)
Project year 2021 2022 2023 2024 2025
Revenue 1,890,000 2,010,000 2,512,500 2,763,750 3,040,125
Operating expenses 157,140 157,140 157,140 157,140 157,140
Gross profit 1,732,860 1,852,860 2,355,360 2,606,610 2,882,985
Operating costs
Administrative
expenses
5000 5,000 5,000 5,000 5,000
Direct salaries 700,008 700,008 700,008 700,008 700,008
Utilities expenses 4,000 4,000 4,000 4,000 4,000
Repair and maintenance 30,000 30,000 30,000 30,000 30,000
Insurance 15,000 15,000 15,000 15,000 15,000
Fuel and lubricants 17,000 17,000 17,000 17,000 17,000
Other expenses 1,000 1,000 1,000 1,000 1,000
Depreciation expense 44,000 44,000 44,000 44,000 44,000
Total operating costs
816,008 816,008 816,008 816,008 816,008
Profit before interest 916,852 1,036,852 1,539,352 1,790,602 2,066,977
Less interest (10%) 31,600 23,980 16,190 8,195
Income before tax 885,252 1,012,872 1,523,162 1,782,407 2,066,977
Provision for tax (30%) 265,576 303,862 456,949 534,722 620,093
Net income 612,676 709,010 1,066,213 1,247,685 1,446,884

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Table 9.7.Loan amortization schedule
Birr 1,264,000.00@10% repayment semi- annually thus r=0.025 R=335,992
Period Beginning Balance Interest Monthly payment Principal Outstanding
1 1,264,000 31,600 304,392 959,608
2 959,608 23,990 312,002 647,606
3 647,606 16,190. 319,802 327,804
4 327,804 8,195. 327,804 0
79,975 1,264,000

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PROJECTED REVENUE
WALMALE NETWOR MARKETING PLC
PROJECTED CASH FLOW STATEMENT
FOR THE YEAR (2021-2025)
Project year Pre-
operation
2021 2022 2023 2024 2025
Own Equity
736,000 - - - - -
Loan
1,264,000
Working Capital
(6,752) - - - - -
Operating cash inflow
612,676 709,010 1,066,21
3
1,247,68
5
1,446,884
Interest
31,600 23,980 16,190 8,195 31,600
Depreciation
44,000 44,000 44,000 44,000 44,000
Profit before tax
544,076 641,030 1,006,02
3
1,195,49
0
1,371,284
Tax
265,576 303,862 456,949 534,722 620,093
Profit after tax
278,500 337,168 549,074 660,768 751,191
Add depreciation
44,000 44,000 44,000 44,000 44,000
Net oper. cash inflow
322,500 381,168 593,074 704,768 795,191
Initial Investment
(2,006,752)
Increase in Nw/capital
34,083 5,770 6,790 6,813 6,839 6,871
Loan repayment
304,392 312,002 319,802 327,804
Terminal Flow
Rec. work. Capital
795,312
Salvage value
Net Cash Flows
(2,006,752) 12,338 62,376 266,459 259,875 1,583,632
N.B The first year operation cash flow seems difficult because the portion of loan repayment, so need for
looking additional cash or Overdraft for the amount , asking for bank for rescheduling for intrest payment
only and principal in later times.

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PROJECT EVALUATION (APPRAISAL)
1. NET PRESENT VALUE
The net present value of the investment project indicates the difference between the present value of the
cash inflows generated by the project and the present value of the project's outflows. If the NPV is
positive –ie, the present value of the inflows increase than the cash outflows - the investment project is
profitable, and vice versa. If there is more than one investment option, the option that gives the largest net
present value is preferred.
The project is profitable or feasible if the calculated NPV is positive when discounted at the opportunity
cost of capital. The discounted rate is 6%.
NPV = CF0 + CF1 + …. + CFn - IO. Accordingly, NPV of the project is:
(1 + K) 0 1 + K) 1 (1 + K) n
=322,500 + 381,168 + 593, 074 + 704,768 + 795,191 - Initial Outlay(IO)
1.06 1.124 1.19 1.263 1.34
= 304,245+339,117 + 498,382 + 558,011+ 593,426 -2,006,752
= 2,286,766 – 2,006,752
=286,429
So, the NPV is greater than zero and the project is acceptable.
2.BENEFIT COST RATIO(BCR)
BCR = Present Value of gross benefit
Present Value of gross cost
= 2,286,766
2,006,752
= 1.14
The ratio is greater than one. This means that the project owner will recover the investment and can get
good return on its implementation.
3. INTERNAL RATE OF RETURN
The IRR is one of the most important criteria used for evaluating and comparing different investment
projects. It is currently used by the World Bank in all types of financial and economic analysis of
projects. As well as by most IFIs when they accept or reject projects submitted for funding. This criterion
is at the rate at which the present value of cash flows is equal to the present value of the cash outflows of

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the project, i.e the discount rate at which the net present value of the investment project is zero. The
following table shows the results of the financial analysis of the project:
The IRR of the project: when NPV/7% + 129,097
The IRR of the project: when NPV/8% - 16,476.27
Absolute value of the summation of the calculated result = 145,573.27
129,097/145,573.27 = 0.9
7%+0.9 = 7.9%
IRR = 7.9% it is greater than internal rate of return. Still the project is acceptable.
4.PAYBACK period
Project year 2021 2022 2023 2024 2025
Annual cash in flow 322,500 381,168 593,074 704,768 795,191
Cumulative 322,500 703,668 1,296,742 2,001,510
1 2 3 4
PBP =
No. of Years Before
Recovery of the I.I.
+
Amount of Investment Remaining to be Recaptured
@ Start of the PBP
Total CFs during the PBP
Recovery =2,006,752-2,001,510= 5,242
PBP =(4)+118,042(the difference of recovery)
= 4 + 5,242
795,191
=4.66
Annual Cash Flow 795,191 (annual cash flow during the PBP year)
So recovery period will be 4 years and 6 months and 6 days.
THE SENSITIVITY ANALYSIS
Sensitivity analysis is conducted to investigate the effects of changes in significant inputs of the financial
analysis to assure that the investors or doubters will accept the project. This includes the decline in
revenues, changes in total investment costs, and increase in operating costs with 3-5%, increments which
indicate that the project in feasible. The following table shows the sensitivity analysis

Page 23 of 25
Project year 6% 7% 8%
PV of cash inflows 2,185,943.18 ,196,051.56 2,050,478.29
Cost increase 2,066,954.56 2,066,954.56 2,066,954.56
NPV 118,988.62 129,097 -16,476.27
 The sensitivity analysis shows the project is feasible up to 7% the discount rate within five years
SOCIO ECONOMIC FEASIBILITY
SOCIAL DESIRABILITY
The purpose of putting up business is not just to generate profit but to give importance to social and
economic benefit that it can provide. The business reduce travel and can minimize traffic jams and
subsequently reduce environmental pollution.
The proposed project will going to increase rate of employment through providing jobs opportunities to
those professional as well as who were unable to attain higher education.
INCREASE IN GOVERNMENT REVENUE
In putting up a business, registration of business is necessary to have permits and license from the
government office. These, along with taxes are then paid as the business operates. Taxes form part of the
government revenues that help to support the needs of the public.
On top of this the project all required materials and supplies for all operation on its business from Jimma
and Addis Ababa This also extended market duet to the business need involvement of other supplier and
the customer is more benefited from this digital and telephone marketing due to the market is convenient
and is up to their door delivery and customer can return the items not meeting his/her specification.
CONCLUSIONS AND RECOMMENDATIONS
 Based on the profitability analysis and considering that project internal rate of return is higher
than the rate of return of the project it is concluded that the project is feasible and viable.
 Initial investment of the proposed project will be birr 2,006,752 (Two million six thousand
seven hundred fifity two only) with minimum pay back 4.66 years
 The net present value of the project is positive 286,429 and this indicates that the project is
acceptable.
 The payback period of the project is averagely short and the investors can recover their cost with
in short period of time.

Page 24 of 25
So, we recommend investors to invest their capital for suitable, technology driven, convenient, at figure
tip, that give a relief from conventional market , profitability and tax paying business for the Jimma.

Page 25 of 25
REFERENCE
1. Chandra prasana (2006) Projects: Planning ,Analysis, Selection, Financing and implementation 5th
edition Tata Mc GrawHill,New Delphi
2. Hormozi, A. M., Sutton, G. S., McMinn, R. D., &Lucio, W. (2002). Business plans for new or
small businesses: paving the path to success.
3. Jimma investment office
4. Jimma trade and Industry office
5. Manual for the preparation of project feasibility study newly revised and expanded edition
(UNIDO, Manual)
6. Sellars, D. (2009). Business Plan Project. A Step-by-Step Guide to Writing a Business Plan. New
York: Business Expert Press.
7. http//:www. engineeringmanagement.info.com

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