CHICHARON BUSINESS

Assumptions
Quota for each course is only 70 students. A 

.maximum of 910 students enrolled

Operated 5days a week. There will be 8 months 

.for academic year. A total of 32 weeks

The owner/operator buys the supply at daily basis 

from the public market using public transportation

Wages are not subject to inflation due of 

contractual agreement
.The cost of capital is borrowed at 18% interest 
Assumptions

:Operating Expenses 

Transportation Expense P14/day 

Maintenance Expense 500/day 

Wages Expense P180/day 

Solvings
no. of no. of
year student Buyer SP COS
0 854 - - -
1 769 4928 15 10
2 692 6643 15.75 10.5
3 761 7306 16.5 11
4 837 8035 17.5 11.5
5 910 8736 18.25 12
6 910 8736 19 12.75
7 910 8736 20 13.5
8 910 8736 21 14
Income Statement
years 1 2 3 4 5 6 7 8

Sales 73920 104627.25 120549 140612.5 159432.00 165984.00 174720.00 183456.00

COS 49280 69751.50 80366 92402.50 104832.00 111384.00 117936.00 122304.00

Gross Profit 24640 34875.75 40183 48210 54600.00 54600.00 56784.00 61152.00
Operating Expenses  
.Transportation Exp 2240 2240 2240 2240 2240 2240 2240 2240
.Maintenance Exp 500 500 500 500 500 500 500 500
Wages Exp 28800 28800 28800 28800 28800 28800 28800 28800
.Interest Exp 7200 7200 7200 7200 7200 7200 7200 7200
.Depreciation Exp 2000 2000 2000 2000 0 0 0 0
Total 40740 40740 40740 40740 38740 38740 38740 38740

Net Income Before tax 16100 5864.25 557 7470 15860.00 15860.00 18044.00 22412.00
Tax Rate (12%) 0.00 0.00 0.00 896.4 1903.20 1903.20 2165.28 2689.44

Net Income 16100 5864.25 557 6573.6 13956.80 13956.80 15878.72 19722.56
Add: Depreciation 2000.00 2000.00 2000.00 2000.00 0.00 0.00 0.00 0.00

Net Cash Flow 14100 3864.25 1443 8573.6 13956.80 13956.80 15878.72 19722.56
NPV
year NCI PV Factor PVCI

0 40000.00 1.000 40000.00

1 14100 0.847 11942.7

2 3864.25 0.718 2774.53

3 1443 0.609 878.79

4 8573.6 0.516 4423.96

48382.48

Do not Invest
 ARR

Original 6573.69/40000= =ARR (AVE) )15947.65/4(

16.43% )40000+2000/2(
0.1898 18.98%

Do not Invest
Payback Period
Payback Period
Year NCI Cash to date Payback Period
1 14100 14100 1
2 3864.25 17964.25 1
3 1443 16521.25 1
4 8573.6 7946.25 1
5 13956.80 6009.15 1
6 13956.80 19965.95 1
7 15878.72 35844.67 1
8 19722.56 40000.00 0.21
years 7.21

Do not Invest
Conclusion
It is not profitable to invest since by 
using the different type of tools to
evaluate the project- (NPV, Payback
.Period & ARR) resulted to a loss
!!THANK YOU