St.

Anthony’s College
San Jose, Antique, 5700

Chapter 1

Background Information

A. Location

The business is named CAPID Water refilling station.

The business presented in this plan is a typical water refilling station to be located at the

Tordesillas St., Sibalom, Antique. The prospective location is in the business center of the town,

but is still near residential areas. Hence, the researchers deemed it a very conducive site for the

business.

B. Vision, Mission and Objectives

Vision

To be the market leader in the water refilling industry in terms of water quality and

customer service in Antique and to its neighboring provinces.

Mission

CAPID’s Water Refilling Station aims to provide clean safe and affordable drinking

water having a quality customer service in terms of delivery that will satisfy customer needs.

Objectives

The project objective of the proposed project is to serve the consumers and employees of

CAPID’s Water Refilling Station by providing drinking water.

Indicatively the project hopes to attain the following objectives:

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a. To provide quality drinking water for customers satisfaction.

b. To help the people in Antique to uplift their positions in life through employment.

c. To supply the needs of every customer and establishing regular customer.

C. Present Status

The business is currently being proposed. The researchers are presently conducting a

project feasibility to ascertain its viability in the proposed location.

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Chapter 2

Marketing Aspect

A. Description of Products and Services

The business will provide purified drinking water-refilling services to customers. Water-

refilling services are chosen as water is a basic human need. The demand for water will never

cease.

Purified water is mostly used for human consumption, however, animals and plants may

also avail of it benefits. It may be used for drinking, food preparation, pet and plant nutrition, and

cleaning activities. Purified drinking water is usually availed by people for consumption of

family members with health issues or who are taking medications.

Purified drinking water has been made available almost everywhere in the province. Big

suppliers provide such in bottled form with varying volumes. Also, the number of water-refilling

stations is fast increasing in Sibalom, as well as, in neighboring towns like San Jose and Belison.

In connection with the chosen target market, 10 local water-refilling stations have been

identified.

Being a water refilling station, the product of the business is purified drinking water. The

Department of Health has issued an administrative order setting the standard for drinking water

to be followed by all waterworks officials, developers and operators of water supply systems

both government and private entities, water refilling station operators, water vending machine

operators, ice manufacturers, all establishments and institutions that supply or serve drinking

water, drinking water laboratories, health and sanitation authorities, the general public and all

other concerned.

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a. Microbiological Quality

Drinking-water supplies should be free from contamination by human and animal

excreta, which can contain a variety of microbial contaminants. Microbiological parameters are

indices of potential waterborne diseases and, in general, are limited to bacteria, viruses and

pathogenic protozoa. The major interest in classifying and issuing standards is the identification,

quantification, and evaluation of organisms associated with waterborne diseases. Practically, all

pathogenic organisms that can be carried by water originate from the intestinal tract of warm

blooded animals.

b. Chemical and Physical Quality

Although acceptability aspects of drinking water quality do not have adverse health

implications, standards are set to satisfy the need of consumers for a colorless, odorless and

tasteless drinking water. Sections 2.9 to 2.13 of the Administrative Order 2007-0012 indicate the

physical and chemical quality requirements of drinking water supply to be provided to

consumers.

c. Radiological Quality

Radioactive contaminants in drinking water may come from naturally-

occurring radionuclides present in rocks and soils from earth's formation and from man-made

radionuclide arising from power generated by nuclear energy. Deep wells, groundwater and

mineral springs have been known to be sources of natural radioactivity, principally radium and

radon. Deposition of radioactive fallout from nuclear weapon testing abroad or from nuclear

accidents, nuclear power plants facilities or from medical use of radioactive substances

may also be a source of contamination. Although the contribution of radioactivity in

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drinking water from above sources is very minimal, it is still important to monitor radioactivity

to protect the public from undue exposure to radiation,

The World Health Organization has set radioactivity levels for gross alpha and gross beta

activity as shown on Section 3.7, in radioactivity units of Becquerel per liter (Bq/L). The

guidelines are based on the fact that radioactivity in drinking water contributes only a minor part

of the total radiation dose received from natural sources. Screening of gross alpha and gross beta

emitters is used to determine whether more complete analyses for specific radionuclides are

needed. The term screening value is used in the same manner as reference level as defined by the

International Commission on Radiological Protection (ICRP). A reference level is not a dose

limit requirement.

Potable drinking water is essential for health. Although, a majority has access to safe

drinking water, not all are well-acquainted with purified drinking water whether due to lack of

information, lack of advertisement, and far location. So, majority of consumers of purified

drinking water are individuals within locations near urbanized areas.

B. Pricing Strategy

The pricing strategy adapted by the business is going rate pricing. As there are already 10

direct competitors in the target market, the above mentioned is chosen. Prices are set to keep the

prices close to the industry average. Being a newcomer in the water refilling industry, CAPID

Water Refilling Station will have to establish its market share, and one strategy to garner patrons

is by offering affordable but quality products. The survey conducted indicated that 51.52% of

those availing of purified drinking water chose their current supplier because of the prices of its

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products. The price of water refilling in the town of Sibalom in which most of the water-refilling

stations are locates ranges from P10.00 to P40.00.

The price of the product will be set to PHP29.00 per container in order to penetrate the

market which sells such products for as high as PHP40.00 per container, at the same time using

the psychological pricing strategy such as the odd-even pricing and prestige pricing. The price

set will also ensure the investors not to occur losses arising from too low or too high selling

prices.

C. Distribution Strategy

Water refilling will be done at the water station. Orders may either be made in person or

by call or text message. Products may be delivered at the station directly to walk in customers or

delivered at the customer’s homes. The business is small, hence, services are directly availed by

customers and there is no distribution channel used.

D. Promotion and Advertisement

The business will make use of radio advertisements to promote the business and attract

potential customers.

E. Other Marketing Strategies

Free delivery of products within the area of District 1, 2, 3, and 4 of Sibalom, Antique

will be provided. There will be no minimum order per delivery; this is to render service for those

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customers that are incapacitated to buy two or more containers for every order because of

financial difficulties.

F. Projected Annual Sales

The target market of the study covers Districts 1 to 4 of the town of Sibalom. The four

areas have a total of 1,740 households according to the National Statistics Office as of 2010. The

demand of the product was estimated using 87 sample households calculated using the Sloven’s

formula.

The survey yielded that 62.07% of the respondents have either local water supply or

wells for their source of drinking water, while the remaining 37.93% avail of purified drinking

water. Out of those who do not use purified drinking water, 38% responded that they are willing

to change to using purified drinking water, while 62% said that they are not. With the

abovementioned, the percentage of willing buyers for the product is 61.52% or 1,070 households

out of 1,740. The results of the survey also showed that the average volume of demand for water

is 19.25 gallons per week per household thereby annual demand of the target market is 1,355,314

gallons of purified drinking water or 271,063 5 gallon containers of purified drinking water.

Ten water refilling stations are currently providing purified water to residents of Districts

1to 4 of Sibalom. Current percentage of household supplied with purified drinking water is

37.93% which is 660 households. Also, average supply of purified water per week per household

is 17.52 gallons. Hence, annual supply of purified drinking water is 554,880 gallons or 110,976 5

gallon containers of purified drinking water.

The unfilled demand for purified water refill based on the above demand and supply is

800,434.29 gallons a year or 160,087 5 gallon containers of purified drinking water. Estimated

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market share for the business is 10% based on the current number of water refilling stations in

the area. Given the market share and annual unfilled demand, annual market share of CAPID

Water Refilling station is 80,044 gallons or 16,009 5gallon containers.

Estimated monthly sales volume based on aforementioned information is 1,334 5 gallon

containers. Identified peak seasons are in the months of December to January, and March to July.

Estimated sales volume for the peak season is 9,338 5 gal containers. Slack season includes

months of February and August to November. Sales volume for these months is 3,335 which

gives the annual sales volume of 12,674 5 gal containers. With the above figures the projected

annual sales is formed. The amounts in the preceding years are based on the annual industry

growth which is 12% and the average inflation rate for the last 5 years which is calculated as

4.9%.

Year 1 Year 2 Year 3 Year 4 Year 5

Volume 12,673.54 14,889.89 17,493.84 20,553.16 24,147.49

Price per
5 gal.
container 29.00 29.00 29.00 29.00 29.00

Sales 367,532.74 431,806.87 507,321.25 596,041.60 700,277.35

Table 1. Projected Annual Sales

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Chapter 3

Technical Aspect

A. Operational Process

The operational process of the business is presented in the following flowchart:

For Walk-in Customers

Customer Refiller/Cashier

Takes Returns filled

Start
customer container to
order customer

Cleans and Bills customer

Gives refill
refills and issue
order
container receipt

Official Receipt Official Receipt

Fig. 1 Operational Process for Walk-in Customers

For walk-in customers the refiller/cashier takes and fills the customer order. He then

delivers the filled container directly to the customer. The refiller/cashier then bills the customer,

receives the customer payment and issues official receipt to same.

As for non-walk-in customers or customer orders via text message or call, the following

operational process is given.

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For Non-walk-in Customers

Customer Refiller/Cashier Delivery Staff

Takes Takes filled

Start
customer container for
order delivery to
customer

Gives refill Cleans and Delivers filled

refills containers to
order
container customers

Bills customers
and issues
receipts

Official Receipt Official Receipt

Fig. 2 Operational Process for Non-Walk-in Customers

As for the filtration and purification process the following table is given. Raw material or

unpurified water will come from NAWASA. Water from NAWASA water system will flow into

raw water storage tank and undergo the following processes.

1st Unit Multimedia Sediment Process

Stage 1 The water first passes through the 1st stage which makes up
of a course gravel that traps solid particles of about 100
micron

Stage 2 Consists of sand filters that remove sediments of 50 micron

ratings

Stage 3 Consists of find sand that eliminates solid particles of 25

microns

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Stage 4 Consists of fine clear silt that eliminates solid particles

down to 5 micron

2nd Unit Multimedia Carbon Process

Stage 5 Makes use of lignite carbon that removes foul taste and
odor.

Stage 6 Makes use of bituminous carbon that eliminates yellowish

and brownish discoloration brought by inorganic
contaminants.

Stage 7 Makes use of granular activated carbon (GAC) as the

multimedia carbon stage. This stage is where the water
undergoes longer contact time with the carbon to eliminate
other contaminants that might cause foul smell or taste.

3rd Unit Water Conditioning and Softening Process

Stage 8 Makes use of resin beads that attract mineral contents that
convert hard water into soft water.

Stage 9 Makes use of ion exchange beads to condition water by

extracting the organic and inorganic chemicals present in
the water.

Stage 10 Makes use of another carbon that eliminates any ferrous

iron (dissolved iron) in water.

Stage 11 Makes use of fine ravel that serves as a sieve which

eliminates any residue that might come out during
regeneration time. This is a cleansing agent.

4th Unit Ultra Micron Process

Stage 12 Consists of one big blue housing that includes 1 micron

cartridge that eliminates any microscopic residue that might
go to the reverse osmosis membrane. This stage stands as
protection for the membrane against premature clogging.

5th Unit Reverse Osmosis

Stage 13 This makes use of reverse osmosis equipment which has

semi permeable membrane that only allows pure water to
pass through and pushes the unpure water out of the system
to the reverse side or the reject drain line.

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6th Unit Polishing Process

Stage 14 Includes one big blue housing that consists of a carbon

cartridge that serves as polishing stage to make the water
crystal clear and shiny.

7th Unit Anti-Microbial Process

Stage 15 This state eliminates cyst microorganisms that has a micron

rating of one and has very thick cell wall where UV light
sometimes cannot penetrate; however, a micron rating of
0.5 will eliminate such kind of microorganisms. Cysts
cause diarrhea and gastro enteritis

8th Unit Water Sterilization Process

Stage 16 This is the stage that kills all microorganisms and other
disease causing bacteria from infiltrating into the product
water, thereby assuring safe and pure water.

Table 2. Filtration and Purification Process

B. Land, PPE, Facilities

The business will rent a store space in Tordesillas St., Sibalom, Antique. The store has an

area of 11.25 square meters which is more than the required space for the franchise which is 10

square meters. A monthly rent of 4,500.00 will be paid for the store space. Renovations will be

made to the store space to cater to the nature of the business. The estimated cost of the leasehold

improvement is 13,180.52. The itemized content of the leasehold improvement is presented in

Schedule 4. The plan for the same is also presented in Exhibit A.

Equipment requirement for purified water refilling business is as follows:

1 unit Reverse Osmosis System 220v/60H2, complete with membrane,

stainless housing, self-standing with gauges
1 unit Multi-Media 220v/60H2, automatic wash with stainless steel jacket,

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9GPM
1 unit Granular Activated Carbon (GAC)
1 unit Single softener with bypass, brine tank, resin, stainless steel jacket.
1 unit Ultraviolet 12GPM 220v/60H2
1 unit Ozone Pure 220v/60H2
1 unit Polisher carbon
1 unit 0.20 Micron with housing
1 unit Pressure tank with pump 1HP, stainless steel
1 unit Storage tank, stainless steel
1 unit Magnetic flow meter 5-5GPM, ½ MPT
Table 3. List of Filtration and Purification Equipment

The equipment will be acquired at the basket price of Php 85,000.00. Freight cost from

Manila to the project location which is Php 3,000.00

C. Materials and Supplies

The direct material for the business is impure water. Supply of direct material will come

from NAWASA. Rate per cubic meter consumption is 14.32.

Direct supplies for the equipment are required to be replaced every 12 to 30 months. In

this study the supplies are replaced every year. The Direct supplies for the purification and

filtration equipment are the following:

20” Slim single filter housing ½” #20 blue 1 pc 1,890.00

20” Slim sediment cartridge polyspon 1 pc 1,470.00
20”Slim carbon cartridge CTO matrix solid carbon 10 micron 1 pc 3,570.00
Ionization mix bed 20”L X 2.5” OD 1 pc 1,470.00

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Absolute cartridge 20”L X 2.5”OD, .2 micron 1 pc 2,415.00

800 GPD membrane 4”OD X 21”L desal Filmtec 1 pc 1,400.00
Membrane cleaning chemical 1 set 236.25
Membrane housing 4”X21” complete with end cap & pins 1 set 1,225.00
Liquid gauge 212” 0-300 PSI 1 pc 420.00
Spare lamp for UV 12 GPM 1 pc 813.75
Ballast for 12 GPM 1 pc 831.25
Mixed Bed 1 pc 1,312.50
20”L X 4.5” OD water softener cartridge 1 pc 2,800.00
20”L X4.5” OD iron reducer 1 pc 700.00
Total for 1 year 20,553.75
Table 4. List of Consumables for Equipment

D. Labor/Manpower

The business will employ the following:

Personnel Number Monthly Salary Annual Salary

Refiller/Cashier 1 5,000.00 60,000.00
Delivery Staff 1 5,000.00 60,000.00
Owner/Bookkeeper 1 5,000.00 60,000.00
Table 5. List of Employees

E. Utilities

Utilities will include electricity, waste disposal, gasoline and oil.

Electricity (Schedule 11) 2,911.53

Waste Disposal (Schedule 12) 100.00
Gas and Oil (Schedule 13) 1,281.56
Total Utilities per month 4,293.09
Table 6. Monthly Utility Cost

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F. Waste Disposal

The business will avail of the waste disposal services of the municipality of Sibalom

which costs Php 40.00 per month. Garbage bag will also be used for waste disposal. Budgeted

amount per month for the garbage bag is Php 60.00.

G. Summary of Cash Operating Cost

The summary of cash operating cost for the first month is presented as follows:

Direct Materials
Impure Water 301.31
Supplies 1,712.81 2,014.13
Direct Labor
Salaries - Refiller 5,000.00
Salaries - deliverer 5,000.00
Benefits - Refiller 450.80
Benefits - Deliverer 450.80 10,901.60
Overhead
Packaging 233.46 13,149.19
Operating Expenses
Salaries - Bookkeeper 5,000.00
Benefits - Bookkeeper 450.80
Rent Expense 4,500.00
Utilities Expense
Electricity 2,882.80
Waste Disposal 100.00
Gas and oil 1,281.56 4,264.36
Business Tax 773.75
Advertising 200.00
Interest Expense 885.42
Income tax Expense 400.71
Total Cash Operating Expense 29,624.22
Table 7. Summary of Cash Operating Cost

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Chapter 4

Organizational Aspect

A. Form of Organization

CAPID Water Refilling Station is a single proprietorship. A single proprietorship is a business

organization wherein a single investor enters into business anticipating all the profits and assuming all the

risks of marketing. It is the simplest form of organization owned by one person with personnel to assist in

the operation of the business.

Single proprietorship is chosen because of its simplicity and the benefits it entail. The profits

earned will revert solely to the individual investor. Moreover, this requires little complex accounting, as

well as, less expenses as to requirements. Also, control lies with only one person.

The project was planned because of the increasing need for water refilling stations in the town of

Sibalom.

B. Organizational Chart

The business is composed of the manager who will also function as the bookkeeper, a refiller also

to act as cahier and one driver or delivery staff. The business’ organizational structure is as follows:

Owner/Bookkeeper

Refiller/Cashier Delivery staff

Fig. 3. CAPID Water Refilling Station - Organizational Chart

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C. Functions and Job Descriptions

The employees of the business will have the following functions:

Owner/Bookkeeper

 Recruits and selects employees.

 Manages the overall operations of the station.

 Plans, implements and evaluates efficiency of the business.

 Plans, implements and evaluates marketing strategies of the business.

 Calculates amounts received and reconciles this with total sales

 Does monthly cost allocations

 Maintains accounting records

 Pays bills due

Refiller/Cashier

 Takes customer orders

 Receives customer container for refill

 Operates the machine for water refilling

 Maintains the purification and filtration equipment.

 Fills customer orders

 Receives payment for water refill

 Issues receipts, refunds, or change due to customers.

 Maintains cash receipts records.

Delivery Staff

 Delivers refilled containers to customers.

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 Takes customer orders for non-walk-in customers

 Receives customer container for refill for non-walk-in customers

 Receives payment for water refill to non-walk-in customers

 Issues receipts, refunds, or change due to non-walk-in customers.

 Inspects vehicle for operation.

 Maintains delivery vehicle.

 Cleans station.

D. Qualifications

For the above positions and their corresponding tasks and functions, the following qualifications

are required:

Owner/Bookkeeper

 A graduate of a business related course.

 Organized, self-motivated, team player and excellent people skills.

 Proficient in bookkeeping and accounting.

Refiller/Cashier

 At least 18 years old

 Hard-working, honest and trustworthy

Delivery Staff

 At least 18 years old

 Has a driver’s license

 Has at least one (1) year driving experience

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E. Compensation Package

The business will give the following compensation package for its employees:

Monthly
Personnel No.
Salary
Refiller/Cashier 1 5,000.00
Delivery Staff 1 5,000.00
Bookkeeper/Owner 1 5,000.00
Table 8. List of Employees

Besides the monthly salary the business also provides employer contributions the Social

Security System (SSS) and the Philhealth. The contributions are presented below:

Monthly Total
Personnel SSS Philhealth
Salary Benefits
Refiller/Cashier 5,000.00 363.30 87.50 450.80
Delivery Staff 5,000.00 363.30 87.50 450.80
Bookkeeper/Owner 5,000.00 363.30 87.50 450.80
Table 9. Employee Monthly Benefits

The above contribution rates are based on the contribution table provided by the Social

Security System and Philippine Health Insurance Corporation for the year 2013.

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Chapter 5

Financial Aspect

A. Basic Financial Assumptions

For the study, the researchers have the following assumptions:

a. Cash operating cost is assumed to increase by 12% which is the industry growth rate

of water refilling station every year subject to the effects of inflation: 4.9%

b. The source of financing comes from 50% loan and 50% investment by the owner

c. The loan shall be paid and amortized monthly using 8.5% annual interest rate

provided by the BPI.

d. Sales are assumed to increase with the average industry growth of water refilling

stations which is 12%, subject to inflation, the average for five years of which is 4.9%

e. Tax expense is business tax applicable to franchise of water utilities which is 2%.

f. Income Tax is computed using the graduated income table.

g. The pre-operating costs are amortized for a period of 5 years.

h. The leasehold improvement is amortized using straight-line basis for a period of 10

years.

i. Depreciation is computed using straight line basis

j. Machinery and Equipment and their estimated lives are as follows:

Item Cost Est. Useful life

Filtration and Purification Equipment 88,000.00 10
Delivery Vehicle (Tricycle) 48,837.00 10
Table 10. Machinery and Equipment Estimated Useful Life

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B. Total Project Cost

The project cost is presented as follows:

Fixed Assets 143,743.19

Pre-operating Cost 18,764.76
Working Capital 87,492.05
Total Project Cost 250,000.00

Table 11. Project Cost

The fixed asset portion is composed of the filtration and purification equipment, delivery

vehicle and the slim faucet containers.

C. Source of Financing

The capital for the business comes from bank loan and owner contribution apportioned as

follows:

Bank Loan @ 8.5% interest 125,000.00 50%

Equity Contribution 125,000.00 50%
Total 250,000.00 100%
Table 12. Financing Scheme

For the financing scheme the capital shall be composed of 50% and 50% equity. Equity

contribution amounted P125,000. The 50% loan equivalent to P125,000 will be obtained from

Bank of the Philippine Islands (BPI) at 8.5% interest payable within three years monthly. The

loan amortization is shown in Schedule 5.

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D. Projected Financial Statements

CAPID Water Refilling Station

Projected Income Statement

Year 1 Year 2 Year 3 Year 4 Year 5

Sales 367,532.74 431,806.87 507,321.25 596,041.60 700,277.35
Less: Cost of Sales: 157,469.33 184,812.31 216,640.28 254,035.20 298,470.56
Gross Profit 210,063.41 246,994.56 290,680.97 342,006.39 401,806.78
Less: Operating Expenses 196,450.49 214,348.22 234,564.01 257,619.54 284,227.29
Earnings Before Interest and Taxes 13,612.92 32,646.34 56,116.96 84,386.85 117,579.49
Less: Interest Expense 9,159.88 5,784.10 2,109.94 - -
Earnings Before Taxes 4,453.04 26,862.24 54,007.02 84,386.85 117,579.49
Less: income tax 222.65 2,186.22 6,101.05 11,377.37 18,015.90
Net Income 4,230.39 24,676.02 47,905.97 73,009.48 99,563.59

(Schedule 21 - Itemized Projected Income Statement)

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CAPID Water Refilling Station

Projected Statement of Cash Flows
CAPID Water Refilling Station
Projected Statement of Cash Flows

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Cash Flows from Operating Activities

Cash received from customers 0.00 367,532.74 431,806.87 507,321.25 596,041.60 700,277.35

Payment to employees 0.00 (196,228.80) (230,252.40) (269,780.94) (316,223.53) (371,539.23)

Payment for raw materials 0.00 (3,434.94) (4,035.64) (4,741.39) (5,570.57) (6,544.75)

Payment for equipment supplies 0.00 (20,553.75) (24,148.19) (28,371.23) (33,332.79) (39,162.02)

Payment for packaging supplies 0.00 (2,661.44) (3,126.88) (3,673.70) (4,316.16) (5,070.97)

Payment for rent 0.00 (54,000.00) (56,646.00) (59,421.65) (62,333.32) (65,387.65)

Payment for utilities 0.00 (51,172.29) (53,679.73) (56,310.04) (59,069.23) (61,963.62)

Payment for Advertising 0.00 (2,400.00) (2,517.60) (2,640.96) (2,770.37) (2,906.12)

Payment for interests 0.00 (9,159.88) (5,784.10) (2,109.94) 0.00 0.00

Payment for business tax 0.00 (7,350.65) (8,636.14) (10,146.43) (11,920.83) (14,005.55)

Payment for income tax 0.00 (222.65) (2,186.22) (6,101.05) (11,377.37) (18,015.90)
Net cash provided by (used in)
operating activities - 20,348.34 40,793.97 64,023.92 89,127.43 115,681.54

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Cash Flows from Investing Activities

Payment to acquire delivery vehicle (48,837.00) 0.00 0.00 0.00 0.00 0.00
Payment to acquire filtration and purification
equipment (88,000.00) 0.00 0.00 0.00 0.00 0.00

Payment to acquire slim faucet containers (6,906.19) 0.00 0.00 0.00 0.00 0.00

Payment for pre-operating cost (18,764.76) 0.00 0.00 0.00 0.00 0.00

Net cash provided by (used in) investing activities (162,507.95) 0.00 0.00 0.00 0.00 0.00

Cash Flows from Financing Activities

Cash received as investment by owner 125,000.00 0.00 0.00 0.00 0.00 0.00

Cash received from bank loan 125,000.00 0.00 0.00 0.00 0.00 0.00

Loan Amortization 0.00 (38,191.43) (41,567.20) (45,241.37) 0.00 0.00

Net cash provided by (used in) financing activities 250,000.00 (38,191.43) (41,567.20) (45,241.37) 0.00 0.00

Net Cash Flow 87,492.05 (17,843.09) (773.23) 18,782.55 89,127.43 115,681.54

Cash - Beginning Balance 0.00 87,492.05 69,648.96 68,875.73 87,658.28 176,785.71

Cash - Ending Balance 87,492.05 69,648.96 68,875.73 87,658.28 176,785.71 292,467.25

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CAPID Water Refilling Station

Projected Statement of Financial Position

CAPID Water Refilling Station

Projected Statement of Financial Position

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Assets
Current Assets
Cash 87,492.05 69,648.96 68,875.73 87,658.28 176,785.71 292,467.25
Supplies Inventory - Slim Faucet Container 6,906.19 6,906.19 6,906.19 6,906.19 6,906.19 6,906.19
Non-current Assets
Filtration and Purification Equipment 88,000.00 88,000.00 88,000.00 88,000.00 88,000.00 88,000.00
Accumulated Depreciation 0.00 (8,800.00) (17,600.00) (26,400.00) (35,200.00) (44,000.00)
Delivery Vehicle 48,837.00 48,837.00 48,837.00 48,837.00 48,837.00 48,837.00
Accumulated Depreciation 0.00 (4,883.70) (9,767.40) (14,651.10) (19,534.80) (24,418.50)
Leasehold Improvement 13,187.00 11,868.30 10,549.60 9,230.90 7,912.20 6,593.50
Other Assets
Other Pre-operating Costs 5,577.76 4,462.21 3,346.66 2,231.10 1,115.55 0.00
Total Assets 250,000.00 216,038.96 199,147.77 201,812.37 274,821.85 374,385.44

Liabilities and Owner's Equity

Loans Payable 125,000.00 86,808.57 45,241.37 0.00 0.00 0.00
Owner's Equity 125,000.00 125,000.00 125,000.00 125,000.00 125,000.00 125,000.00
Accumulated Earnings 0.00 4,230.39 28,906.40 76,812.37 149,821.85 249,385.44
Total Liabilities and Owner's Equity 250,000.00 216,038.96 199,147.77 201,812.37 274,821.85 374,385.44

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E. Financial Evaluation

A project Financial Evaluation (PFE) is an in-depth investigation of cash flow and risk

with the object of determining a project’s eventual return on investment. The PFE is meant to

look at all the fiscal factors involved in undertaking the project; without it, a business entity does

not have the information it needs to make an informed decision about a given projects scope and

risks.

a. Payback Period

Unrecorded
Year Cash Flow balance No. of Years

0 (250,000.00) (250,000.00) 0

1 20,348.34 (229,651.66) 1

2 40,793.97 (188,857.69) 1

3 64,023.92 (124,833.77) 1

4 89,127.43 (35,706.34) 1

5 115,681.54 79,975.20 0.3087

Payback Period 4.31
Table 13. Payback Period

The payback period of an investment tells us the number of years required to recover the

initial cash investment of Php250,000.00. The calculated payback period of 4.31 years is less

than the minimum acceptable payback period. It would be acceptable on the part of the proposed

water refilling station since the estimated life of the filtration and purification equipment is ten

years therefore the proposal is acceptable.

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b. Net Present Value

Net Present Value

Year 1 2 3 4 5

Cash Inflow 20,348.34 40,793.97 64,023.92 89,127.43 115,681.54

PV Factor @ 4.9% 0.9533 0.9088 0.8663 0.8258 0.7873

PV of Cash Inflow 19,397.85 37,071.91 55,464.59 73,605.36 91,072.37

Total PV of Cash Inflow 276,612.07

less: PV of Cash Outflow 250,000.00

Net Present Value 26,612.07

Table 14. Net Present Value

Net Present Value (NPV) of the project is the difference between the sum of the expected

net cash flows from operating activities and the amount of Php 250,000.00 which is initially

invested. The computed NPV simply expresses how much value an investment will result in by

measuring all cash flows over time back towards the current point in present time. The project is

feasible because it yields an NPV of Php 26,612.07 which is greater than zero.

c. Return on Investment

Return on Investment
Year 1 2 3 4 5
Income
4,230.39 24,676.02 47,905.97 73,009.48 99,563.59
Investment 250,000.00 250,000.00 250,000.00 250,000.00 250,000.00
ROI 1.69% 9.87% 19.16% 29.20% 39.83%
Table 15. Return on Investment

The return on investment (ROI) is a performance measure that is used to evaluate the

efficiency of a number of different investments. Since the researchers computed a positive ROI

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for five succeeding years, therefore, we conclude that there is an opportunity for the investment

of the project to be acceptable and could be able to generate an acceptable rate of return. On its

first year of operation, the business generates net operating income of Php 4,230.39 out of Php

250,000 investments and continues to increase for four succeeding years.

d. Break-even Analysis

Year 1 2 3 4 5

Sales 367,532.74 431,806.87 507,321.25 596,041.60 700,277.35

Variable Costs 43,028.82 50,553.70 59,394.53 69,781.45 81,984.82

Contribution
Margin 324,503.92 381,253.17 447,926.72 526,260.15 618,292.52

Fixed Costs 255,223.05 292,018.09 334,453.88 383,946.16 442,460.99

CM% 88.29% 88.29% 88.29% 88.29% 88.29%
Break-Even Sales 289,065.31 330,739.33 378,802.05 434,856.95 501,130.77
Table 16. Break-even Analysis

Break-even point (BEP) is the point at which cost or expenses are equal. The computed

break-even point for five consecutive years as shown simply tells us that if the water refilling

station could be able to generate this amount of revenue, there will be neither net loss nor net

gain. In addition, this computed amount will be lower limit of profit when setting prices and

determining margins. This computed amount will also be the operating profit margin level at

which the business or investment is earning exactly the minimum acceptable rate of return.

Thus, the business should generate a sales not less than Php 288,712.62 on first year, Php

330,386.64 on the second year, Php 378,449.35 on the third year, Php 434,504.25 on the fourth

year and Php 500,778.08 on the fifth year.

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San Jose, Antique, 5700

e. Profitability Index

Total PV of Cash Inflow 276,612.07

Investment ÷ 250,000.00
Profitability Index 1.1064
Table 17. Profitability Index

Profitability index or also known as benefit/cost ratio of the project refers to the present

value of future net cash flow over the initial cash outlay. For every Php 1.00 invested in this

project, the total value created is Php 1.2307 in 5 years. Therefore, we have a net profit of Php

1.2307 - 1 = Php 0.2307 per every Peso invested.

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San Jose, Antique, 5700

Chapter 6

Socio-Economic Aspect

Government Benefits

The revenue that will support the project of the government is in the form of business tax

and income tax. This refers to the approximate annual amount of taxes to be paid by the project

and the workers to the government. This project can increase the revenue of the government and

through these taxes that it will pay it can help the government in its projects in community

development and progress to the country as a whole.

Consumer Benefits

This proposed project could give benefits to the consumers. Water is one of the basic

necessities and as they say one can live for several days without food but not without water. One

of the primary reasons for the project proposal was the provision of safe, clean and affordable

water to the consumers. Potable water is available but given the waning environmental

conditions, water quality is also deteriorating. So an increase in purified water provider will

surely be beneficial to consumers.

Also some people are getting conscious of their water intake. People are no longer

satisfied and do not feel safe in drinking water from their own faucets at home. The need of the

customer for the assurance for safe and clean drinking water is provided through this kind of

project. This will also give satisfaction by delivering better value services to its customers.

Water is life and it is essential so we will make sure that the water we will be selling is safe and

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clean and as possible economical for customers affordability. This project benefits not only the

people of Sibalom, Antique but it is also intended for every household in Antique.

Employment

Since the proposed project will only employ at least (3) three persons namely the

owner/bookkeeper, refiller/cashier, and a delivery staff, this can be a slight help in solving

problem of unemployment especially to those who are eager, capable and in need of a job. This

will be the enhancement in the standard of living of every employee since it can increase the

purchasing power, which will be addressed by their salaries and some of other benefits.

Incentives that will be provided are SSS and PhilHealth. The salaries that would be provided

for them will help support their daily needs.

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Chapter 7
Implementation

The necessary preparations for the implementation of activities of the proposed project, CAPID
Water Refilling Station are as follows:

Table 18. Gantt Chart

Projected Schedule and Time Table

Gantt Chart
Month 1 2 3 4
Week 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Legend
 for the study of the project will be made by the researchers to ensure its feasibility.
The plan
 of the Business Plan to the proponent.
Proposal

The proponent will negotiate regarding on the water refilling station.

Negotiation of the Rented Space at Tordesillas St., Sibalom, Antique.

The proponent would apply for loan at Bank of the Philippine Islands.

The owner will acquire materials necessary for Rented Space Improvement.

The owner will acquire the needed delivery vehicle.

Construction for improvement of Rented Space and Delivery and installment of the filtration and purification equipments.

The owner will comply for the permits and licenses before the business starts.
Hiring of employees.
 the operation.
Starting
 radio advertisement with DYKA.
Start of

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Chapter 8
Conclusion

The intent of this plan is to introduce the promotion of the CAPID water refilling station

located at the Tordesillas St., Sibalom, Antique.

Based on the results the proposed project is considered to be feasible.

In the socio-economic and environmental impact, the revenue of the business will

support the project of the government in the form of taxes; it will also provide the enhancement

of the standard of living of its hired employees through salaries and wages as well as providing

quality drinking water for its stakeholders at an affordable price.

In terms of its organization and management aspect, it will be easily managed and

supervised by the owner since it will only employ two regular employees.

When done in accordance with the plan, the first five years of operations is expected to

generate enough revenue to cover all the expenses at the same time generating profit for the

owner. The proposed business will be able to fully return the initial investment within 5 years

and continue the operation until the machineries and equipment will be fully depreciated for

another 5 years. Results shows that the present value of the future cash flow within 5 years are

greater than zero which is only means that this plan is profitable. Although earnings will only be

minimal in the first year operations, succeeding years shows a greater rate or returns which is

good in the part of proponent.

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