Feasibility Study Excel Template

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Statement for Initial Cash Outflow

Particulars Amount ($)

Initial Investment ₱ 17,500,000
Less: Subsidy ₱ -
Add: Working Capital ₱ 2,000,000
Net Initial Outflow ₱ 19,500,000

Cost of New Equipment ₱ 17,500,000

Total Life of Orignal Equipment ₱ 8

Additional Equipment / Salvage
Value ₱ 1,250,000
Total Life of Additional Equipment
₱ 5
Salvage Value ₱ 125,000

Calculation of Depreciation:-
Depreciation = Asset Cost - Salvage Value / Useful Life of Asset

Calculation based on Depreciation

Particulars Year
SLM Method (Amount)

Dep. on Original Equipment 1 Year - 3 Year (17,500,000 – 0)/ 8 ₱ 2,187,500

Dep. on Additional Equipment - (1250000-125000)/5 ₱ 225,000

4 Year - 8 Year - ₱ 2,412,500

Statement for PBT

Sales Volume Variable Cost @

Year Sales Price Net Sales
(Units) 60% of Net sales
1 ₱ 72,000 ₱ 120 ₱ 8,640,000 ₱ 5,184,000
2 ₱ 108,000 ₱ 120 ₱ 12,960,000 ₱ 7,776,000
3 ₱ 260,000 ₱ 120 ₱ 31,200,000 ₱ 18,720,000
4 ₱ 270,000 ₱ 120 ₱ 32,400,000 ₱ 19,440,000
5 ₱ 270,000 ₱ 120 ₱ 32,400,000 ₱ 19,440,000
6 ₱ 180,000 ₱ 120 ₱ 21,600,000 ₱ 12,960,000
7 ₱ 180,000 ₱ 120 ₱ 21,600,000 ₱ 12,960,000
8 ₱ 180,000 ₱ 120 ₱ 21,600,000 ₱ 12,960,000

Statement of Net Cash flow Inflow:

Statement for Discounted Cashflows
 Year PBT Tax @ 30% of PBT PAT Depreciaiotn

1 -531500 0 -531500 2187500

2 1196500 199500 997000 2187500
3 8492500 2547750 5944750 2187500
3 Cash Outflow for Additional Equipment = $
4 8747500 2624250 6123250 2412500
5 8747500 2624250 6123250 2412500
6 4427500 1328250 3099250 2412500
7 4427500 1328250 3099250 2412500
8 4427500 1328250 3099250 2412500
8 Realization of Working Capital
8 Sales of Additional Equipment (Salvage Value)
Total Discounted Cashflows

Note: Company incurs losses in its first year; therefore it is liable to pay zero taxes. Also company is allowed to adjust
its losses for two subsequent years for tax purposes. Hence profit before taxes (PBT) for second year will be reduced
by losses of first year to (i.e. $ 1,197,000 – 532,000 = 665,000). Tax @ 30% on 665000 = 199500.
Or (30% of 1196500 - 30% of 531500) = 3589500 - 1594500 = 199500

Net Present Value

Particulars Amount
Total Discounted Cash Inflow $27,553,937
Total Discounted Cash Outflow $19,500,000
Net Present Value $8,053,937

Advice: Since NPV is positively high, hence project should be accepted

 FixedCost Depreciation PBT

₱ 1,800,000 ₱ 2,187,500 -₱ 531,500

₱ 1,800,000 ₱ 2,187,500 ₱ 1,196,500
₱ 1,800,000 ₱ 2,187,500 ₱ 8,492,500
₱ 1,800,000 ₱ 2,412,500 ₱ 8,747,500
₱ 1,800,000 ₱ 2,412,500 ₱ 8,747,500
₱ 1,800,000 ₱ 2,412,500 ₱ 4,427,500
₱ 1,800,000 ₱ 2,412,500 ₱ 4,427,500
₱ 1,800,000 ₱ 2,412,500 ₱ 4,427,500
 PV Factor @ Discounted
Cash Inflows
12 % Cash Flows

$1,656,000 $1 $1,478,571
$3,184,500 $1 $2,538,664
$8,132,250 $1 $5,788,375
-$1,250,000 $1 -$889,725
$8,535,750 $1 $5,424,623
$8,535,750 $1 $4,843,414
$5,511,750 $1 $2,792,424
$5,511,750 $0 $2,493,236
$5,511,750 $0 $2,226,103
$2,000,000 $0 $807,766
$125,000 $0 $50,485
$27,553,937

is allowed to adjust
ear will be reduced