Question 1) While preparing a financial model what are the

assumptions we need to take. Please list down the list of

assumptions with the values, assuming the project will be
setup in India.
Answer :-
ASSUMPTIONS
A financial model is a set of assumptions about future
business conditions that drive projections of a company's
revenue, earnings, cash flows and balance sheet
accounts. ... Like financial statements, one generally reads
the model from the top to the bottom, or revenue through
earnings and cash flows. This can be better understood
using an example.
Let’s say we use the commercial space for opening a tea
café in India. As the purpose of opening the cafe is to make
profits, and profits are given by the difference between
revenue and costs.
Revenue assumptions
Based on your study of other tea cafes in the area, you
expect the following assumptions for your business’s
revenue:
 You’ll sell an average of 150 cups of tea per day
throughout the year.
 Forty percent of tea sold will be in large cups; 60
percent will be in small cups.
 You’ll charge ₨ 150 for a large cup of tea and Rs 70 for
a small cup of tea.
Expense assumptions
In your analysis, you’ve also researched the operating costs
of running a cafe, which are the following:
 The rent expense will most likely be Rs 40000 per
month. This is just an estimate, though — you’ll enter
some potential fluctuations into the scenario analysis
later on.
 Consumables — including tea brand, cups, filters, and
so on — will cost you Rs 65 per cup. This amount has
been averaged over both large and small cups, so you
won’t need to distinguish between size for the purpose
of this model.
 Monthly utilities, such as electricity, heat, and water,
will cost Rs 5000 per month.
 The company income tax rate is 30 percent.