VCE Summer Internship Program 2020

Smart Task Submission Format

[ Download This Format in .DOCX format and then Edit it and SUBMIT ]
Intern’s Details
Name Sandeep Dwivedi

Email-ID Itssandeep09@gmail.com

Smart Task No. SM02

Project Topic Project Finance

Smart Task (Solution)

1. Task Q1 : 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 set up
in India.

Task Q1 Solution :
There is a whole range of assumptions and these will vary on the type of project and the industry. You will
have some generic economic and financial assumptions:

 exchange rate
 inflation
 interest rate
 etc
And then a very different set of industry and project-specific assumptions e.g. the assumptions for building a
shopping centre vs developing an eCommerce marketplace vs building a new ERP software system vs
financial model for delivering the Olympic Games vs SaaS startup vs expanding product ranges vs digital
twin for business optimisation simulations will each be very different.

In order to get input on relevant assumptions, you need to be specific about the exact financial model. Not
only the type of industry and sector but also on the purposes and objectives of the financial model eg:

 Internal management information

 Venture capital
 Bank loan
 Listing on stock exchange
 Due diligence for a sale or merger

ST Solution Page 1 https://techvardhan.com

 VCE Summer Internship Program 2020
Smart Task Submission Format

500 Words (Max.)

Task Q2 :
Explain the function of revenue, cost and debt sheet of the financial model.

Task Q2 Solution :

Revenue: It implies that there are 2 cash inflows. One is rent and another is interest earned on
the deposits paid by tenants. This total is the revenue earned.

Cost: It covers all the cost incurred during setting up of project. It includes all the hard costs as
rent, interior decoration, furniture etc. as well as miscellaneous costs as Broker Fee, Stamp
duty, CSR, training etc.

Debt: It covers the description about loan amount, interest accrued and paid over the
moratorium period.

500 Words (Max.)

Task Q3 :
Explain in detail the various steps involved (with the importance) in
the fin flows sheet. Why and what the bank needs to check before
financing the project.
Task Q3 Solution :
The various steps involved in the fin slows sheet are:
 Revenue generation form Rent and interest in deposits are accounted.
 Operating Expense such as salary, electricity, utilities etc are included.

ST Solution Page 2 https://techvardhan.com

 VCE Summer Internship Program 2020
Smart Task Submission Format

 Difference of Revenue and Expenses gives PBT(Profit Before Tax).

 Tax is calculated and included.
 PBT – Tax gives PAT (Profit after tax). This is the net income of the company. Bank needs to
look upon PAT, Revenue, Misc. Expenses, Debt to understand the way company is functioning
and earning its money.

500 Words (Max.)

Task Q5 :

Task Q5 Solution :

500 Words (Max.)

Task Q6 :

Task Q6 Solution :

500 Words (Max.)

Please add /delete blocks for if needed.

ST Solution Page 3 https://techvardhan.com