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Feasibility Of: Foam Production Project
Feasibility Of: Foam Production Project
FOAM
PRODUCTION
PROJECT
PROMOTER:
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Feasibility study for Foam Mattress and Foam Mattress
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
I. EXECUTIVE SUMMARY
This document is about viability of project on the manufacturing of Polyurethane (PU) foam
that produces mattress and uncovered foam sheets. In order to bridge the prevailing gap
between demand and supply Ethiopia relies on imports, the foam mattress products are
supplied to the domestic market.
The plant commenced production by installing used foam processing machineries which has
less production efficiency that increases production cost when the production volume
increases. The existing machinery which has book value of less than half million would not
enable the promoter to produce competitive products. Therefore, in order to increase
production volume to better meet the demand and produce cost effectively, the expansion of
the project with brand new machinery has become paramount important.
The promoter of the project is Ato Yohannes Tesema, who has running a sole proprietor
business of wholesale and retail trade of similar foam products for the past 10 years.
Realizing the cost and benefit, he has entered into the manufacturing of foam mattresses and
foam sheets. The foam mattress has entered the market upon starting of Ato Yohanes’s
factory. The promoter has registered trade name of Yohannes Tesema foams. The plant is
located at Ayer Tena town within leased compound land. The total area required for the
envisaged project will be 960 m2. The built-up area of the plant will be 250 m2. The plant
will have production buildings, stores, office buildings and other civil structures. The total
cost of buildings and civil works shall be Birr 9.98 million. The less complex production
process, ever growing and persistent demand, encouragement of the government and the
promoter’s rich experience in the bedding articles wholesale and retail trade are among the
driving factors to involve in foam manufacturing.
The implementation of the project requires finalizing the construction of the production
building, importation of machinery, purchase of vehicles and recruitment of required human
resource.
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
The total investment cost of the project is Birr 41 million. It is planned that 52% of the total
project or Birr 21 million would be financed from equity and the remaining 48% or Birr 20
million is expected to be financed with bank debt.
The factory starting with 40% capacity utilization rate and increment by 10% per year, up to
attainable capacity of 90%, would make attractive profit throughout its operational years and
generate positive net cash inflows. The corresponding of the cut-rate cash net inflows at the
rate of 17.5% less the original outlay cost equals Net Present Value (NPV) of Birr 114
million. The internal rate of return (IRR) is 54% which is a good deal on top of the
considered cost of capital. These two major feasibility indicators show that the project is
financially viable.
The realization of the project as ascertained in the financial appraisal, enables the promoter
to generate higher net benefits, creates employment to the local labor force, generates tax
revenue and save hard currency by substituting imports. Manufacturing Industry is one of
the top priority sectors that government selected to achieve the country’s development
targets. These parameters are basic indicators of the project’s priority, social desirability and
economic viability. Therefore, it is advisable to finance the cost requirements from any
available source.
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
A mattress is a large pad for supporting the recline body, used as or on mattress support/bed/.
Mattresses may consist of a covered or similarly fastened case, usually of heavy cloth, that
contains hair, straw, cotton, foam rubber, etc.; a framework of metal springs; or they may be
hot-air balloon. Firm Mattress_ Manufacturers use specific design techniques to create beds
that have a firm style surface. The use of carefully selected foams, in conjunction with tighter
sewing patterns in the quilt, both help to create this firm feel. Firm mattresses typically have a
lower height than their plush top counterparts. Firm mattresses offer optimal support, but are
designed to offer limited contour ability. Firm
mattresses can also be classified by manufacturers
by terms such as luxury firm and cushion firm or
can be paired with a Cushion firm mattresses tend
to be a bit softer feeling than those classified
solely as firm, but are sometimes the only firm
feeling option from a manufacturer at a particular
level
3.1. Rational
From his trading experience of about 10 years in the same type of goods, the promoter of the
project has realized existence of regular demand gap for foam mattresses in Ethiopia and
coupled with the incentives in the area availed by the government, helped him to decide to
invest in the foam production project.
The market analysis of the project has demonstrated that there is reliable market in the
domestic market. The local foam processors also couldn’t supply adequate quantity of foam
as compared to the demand of the consumers. The gap is filled from the import market.
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
The time frame for the project is deemed tolerable by assuming there will be no major
incidences out of the scope of the promoter control.
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
JulyJune,
August
Jnov.
Year
April
Dec.
June
Janu
May
Mar
July
Feb
oct
Spt
Activity
Securing
Finance
Completion of
Factory
Construction
Importation of
2021/22
Machinery
Installation of
Machinery
Recruitment of
Additional
Commissioning
& Operation
The promoter of the project is a sole proprietor Ato Yohannes Tesema. The Foam
business is the registered trade name-of the business. The promoter has 10 years’
experience in other business. Performance wise, Ato Yohannes has been successful in
smoothly undertaking his existing business activities transactions and generated
encouraging return over the preceding years. The promoters’ rich experience and the
returns of his business served as springboard for the new businesses that he is currently
undertaking.
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
Quality
Manager Control
Production
& Technique Head-
Sanitation
Accounts
Managing Factory
Directorr Manager Manager-
Human
Finance &
Admin. Resource
Logistics
Manager--
RM
Marketing Sales
&Promotion Procurment
The plant require 33 permanent and 20 daily laborers, total 53 employees including
managerial, professional, skilled, semiskilled, and unskilled staffs. The total cost of human
resource is described below
es Salary
Birr Birr
General Manager 1 35,000 420,000
Deputy General Manager 1 15,000 180,000
Administrative and HRM
Admin. And HR Manager 1 8,500 102,000
Admin. Officers and Assistant 5 4,500 270,000
Finance Department
Finance Manager 1 9,500 114,000
Finance team leader 1 6,400 76,800
Finance professionals 4 16,800 201,600
Production Department
Production Manager 1 9,500 114,000
Technical Manager 1 7,500 90,000
Daily Laborers 11 1,500 198,000
Foam production personnel 16 32,000 384,000
Procurement Department
Procurement Manager 1 9,500 114,000
Purchaser 2 3,00 72,000
0
Production and Logistic
Planning and logistics manager 1 8,50 102,000
0
Marketing & sales
department
Marketing and sales department 1 114,000
Manager 9,500
Marketing and Sales personnel 5 210,000
17,500
Total Existing Personnel 53 2,762,40
0
5 MARKET ANALYSIS
Polyurethane (PU) foams constitute the largest category of cellular polymeric materials. They
are produced, for the most part, in either flexible or rigid form. Within these groups, the
density and other properties vary depending on the end use. PU foams offer an attractive
balance of performance characteristics (aging properties, mechanical strength, elastic
properties, and chemical resistance, insulating properties) and cost. Flexible PU foams are
used primarily for cushioning and rigid PU foams for insulation.
Polyurethane foam demand is relatively close to production because trade is not economic
over larger distances. Even within the United States and China, supply geographically
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
follows demand very closely. However, in Europe trade in higher-valued foams and
compressed foam rolls has increased significantly. The major drivers for global polyurethane
foam markets are regulation and energy efficiency increasing world population, particularly a
rising middle class in the emerging markets
Apart from the middle class population both in urban and rural, universities and hospitals buy
the bulk of the products directly from the factories whereas wholesalers and retailers will take
care of the individual market demand by providing various brands of foam from different
factories. Traditionally it is not only price but also older brands that lure customers to a
certain product in Ethiopia but there is still untapped market for the product.
Supply of foam mattresses is originates from domestic producers and from the international
import market. Currently in Ethiopia the production of foam becomes competitive and the
number of producers has been increasing. According to Ethiopian Investment agency, the
country’s aggregate production is supplied by Kangaroo Foam, Addis Abeba Foam, Rainbow
Foam, Palm Ethiopia, Ethio-Foam, Amaga PLC, Tiger, New Flower, Metiket foam as well as
three Chinese and one Yemeni producer.
The chemicals which are inputs for the production of foam are mostly imported from China.
The amount of chemicals and their combination will determine the density of the foam,
which in return determines the quality of the foam. Foam, with a high density also known as
HD foam products represents a high quality, having longer durability and comfort while
medium density results an average quality and the lower density LD is known for being a
lesser quality product.
According to the CSA data summarized in the following table, the total foam production of
the country is between 99.6 millionM 3 and to 727.7million M3 within the past 10 years (2011-
2020). This growing amount of production represents the total production achieved by a
combining effect of expansion of existing factories, increasing capacity utilization of existing
factories and due to new entrants.
From the foam produced which is used for different purposes such as mattresses, sofas,
vehicle seat, cleaning, the volume used to production of mattresses and pillows considered to
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
take 65% of the total foam produced. A common size mattress consumes on average 0.416m 3
sheet of foam. The produced foam mattresses within the past 10 years therefore ranges from
155,652 to 1.137 million mattresses as shown below.
Source: IRCA
IMPORT OF MATTRESS SUPPORT
Year Net Wt. (Kg) CIF Value (ETB) CIF Value No of Mattress Required Growth
(USD) @(11kg/Unit
2011 17,992.90 224,840.15 25,687.80
2012 19,800.66 376,888.00 42,902.76 10%
2013 41,311.75 852,188.60 94,188.43 109%
2014 60,095.14 1,299,723.71 134,169.17 45%
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
Ethiopia’s had been involving in exporting of foam mattresses however, the volume was only
insignificant but also ceased to continue as of the year 2011. The following table shows the
smaller and discontinued export volume.
Export of Mattresses
Net Mass(Kg) FOB_Value (ETB) FOB_Value(USD)
2011 712 6,976 797 129
2012 810 4,910 559 147
2013 553 5,881 650 101
2014 110 2,773 286 20
2015 740 15,902 1,339 135
2016 304 12,308 845 55
2017 0 0 0 -
2018 0 0 0 -
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
As shown above, the demand gap ranges from 73,695 to 279,565 pieces of foam mattresses
from 2021-2030. Apart from the observed demand the new entrants also have the potential to
replace the import volume that is also additional opportunity the investors. Even if the
forecast is made based on past consumption trend the next 10 years has the potential to
exhibit larger consumption with regard to the increasing per capita consumption that could
transform the rural population from using other forms of traditional mattresses to foam
mattresses.
Price - As the product is offered to the well-established local market, price trends are known
and determined by the market. The producer gets advantage of cheap labor cost which intern
enable to charge lower price to compete in the market. The price to be charged would be the
going market price for similar product that the promoter is trading for the past 10 years.
Depending on the market response to the product and cost of inputs, periodical revision of
product price is taken into consideration.
Promotion - Promotion is vital for any business. The product should be advertised through
electronic and print Medias. The mattress cover is also serves as one advertising media for
almost all foam producers. The factory has marketing links with distributors in Addis Ababa
and regional towns. Commission based sales is also common practice the existing
wholesale and retail trade of similar products. As a strategy, the promoter uses a combination
of all the above techniques as appropriate. Adequate budget is allocated for the marketing
works.
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
Place (Location)- the place of processing-Ayer Tena is where raw materials for both
products are shortly deliverable from Addis Ababa and also to offer the finished products to
the main market area of the country-Merkato and to different regional towns
6 TECHNICAL ANALYSIS
6.1 Utilities
Availability of adequate water, electricity, telephone lines, etc. at the project site is
indispensable for smooth operation of the plant. In this regard, the project will be
advantageous, as all the necessary infrastructures are expected to be available at the project
site. The project has allocated for installation of electric power and for water line installation
within the premise of the factory is Birr 628,941
Buildings- The total area required for the envisaged project will be 960 m2. The built-up area
of the plant will be 250 m2. The plant will have production buildings, stores, office buildings
and other civil structures. The total cost of buildings and civil works shall be Birr 9.98
million.
Glazing 141,022.40
Sanitary Installation 355,080.00
Electrical Installation 775,759.05
7,481,731.20
Sub Total 8,681,088.50
VAT 1,302,163.27
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
Total 9,983,251.77
6.3 Vehicles
For the transportation of raw materials and distribution of finished products the project
requires vehicles. The existing operational project uses vehicles even if are not included in
the recent financial statement due to different ownership other than the promoter. Therefore,
only one Toyota Hilux pick up is considered to be purchased as a requirement for
administrative support work. The following table indicates the required vehicles cost.
Total 137,689.50
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
Daily Consumption
Unit of
Type of Product Raw Material of raw material( 1
Measurment
ton)
Polyol KG 1,035
TDI(20/80) KG 478
Silcon KG 11
Methylene Chloride KG 11
Amine 33 LW KG 6
High Density Foam Amine BL 11(A1) KG 6
Thinner KG 10
Dyeing Chemical/PU
KG 8
color
Kraft Paper (90GR/M2) KG 6
Naylon KG 3
Unit of
Raw Material
Measurment
Polyol KG 1,773
TDI(20/80) KG 819
Silcon KG 19
Methylene Chloride KG 19
Amine 33 LW KG 11
Medium Density Foam Amine BL 11(A1) KG 11
Thinner KG 17
Dyeing Chemical/PU
KG 13
color
Kraft Paper (90GR/M2) KG 11
Naylon KG 5
Unit of
Raw Material
Measurment
Low Density Foam Polyol KG 148
TDI(20/80) KG 68
Silcon KG 2
Methylene Chloride KG 2
Amine 33 LW KG 1
Amine BL 11(A1) KG 1
Thinner KG 1
Dyeing Chemical/PU KG 1
color
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
Capacity 40% 50% 60% 70% 80% 90% 90% 90% 90%
Polyurethane foam is a common component of mattresses. Even very high end mattresses
make use of this material to provide a comfortable and supportive sleeping surface. Most
people sleep on a mattress which contains at least a little bit of polyurethane. However, not
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
many people know much about it. Mattresses perform better based on three factors:
durability, comfort, and support. A mattress which contains properly used polyurethane foam
can provide a comfortable surface with all three of these properties. Foam also offers the
benefits of being noiseless, dustless, and resisting crumbling and matting. Polyurethane foam
does not aggravate the majority of allergies and lacks a residual odor. It also has an open cell
structure that lets the material breathe and reduces the chance of mold and mildew
infestation.
7. FINANCIAL Appraisal
Financing Structure
Description Total cost Promoter's Equity Bank Loan
% Amount % Amount
Building and Civil Work 100% 0%
9,873,090.82 9,873,091 -
Production Plants and 100% 0%
Machinery-new 526,932 526,932 -
Transformer 100% 0%
470,019 470,019 -
Utilities 100% 0%
628,941 628,941 -
Motor vehicles & forklift 100% 0%
5,891,301 5,891,301 -
Furniture and Fixtures 100% 0%
Expansion 137,694 137,694 -
Total Fixed Investment 100%
17,527,977 17,527,977 -
Pre-operating Expenditures 100%
556,997 428,459 -
Pre-operating interest 100% 0%
3,508,876 2,699,135 -
Working Capital 0% 100%
20,000,000 - 20,000,000
Sub Total 24,065,873 17% 4,065,873
20,000,000
Total Investment cost 41,593,850 21,593,850
20,000,000
Contribution 52% 48%
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
Total 436,500.00
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
3. Property Insurance premium: 0.5% for the buildings cost and Machinery cost;
7.5.1 Price
Average price of mattresses ranges from 2,500 to 3,100 even though, little lower
than as compared to other competitor’s price, has been showing significant growth
over the past 6 years.
Price would be adjusted based on market and materials cost Price reduction up to
10% is also tested in the sensitivity analysis as it wouldn't affect much the profitability
of the project.
Desc
ripti Full
on / Capacit Year- Year- Year Year Year- Year- Year- Year-
Year y Year-1 Year-2 3 4 -5 -6 7 8 9 10
Cap
acity 100% 40% 50% 60% 70% 80% 90% 90% 90% 90% 90%
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
Bank 20,000,
Loan 000
Working
capital
Recover 20,00
y 0,000
Salvage 6,537
Value - ,932
Loan 19,3
Repaym 13,263, 14,569, 16,00 17,57 09,0 15,46
ent 508 145 3,306 8,644 56 8,020 -
3,17
Financial 9,220,4 7,914,7 6,480 4,905, 4,86 1,274
Charge 08 71 ,609 271 0 ,110 - -
Profit
Tax 2,421,2 4,578,2 6,649 8,761, 10,9 13,12 13,44 13,39 13,33 13,26
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Feasibility study for Foam Mattress and Foam Mattress
16,7
84 04 ,540 040 65 1,180 9,153 2,234 2,526 9,888
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YOHANES TESEMA Foam Industrial Enterprise June 2021 Addis Ababa
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
81,371,0 101,713,7 122,056,5 142,399,2 162,742,0 183,084,7 183,084,7 183,084,7 183,084,7
04 55 06 57 08 59 59 59 59 183,084,759
Item 15,423,629
IRR 54%
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Feasibility study for Foam Mattress and Foam Mattress
Revenue decline,
Fixed cost increment,
Operating cost increment and
The benefits variation is depicted below:
As shown above, the project is less sensitive to increments in fixed investment cost, but sensitive to revenue decline followed by increments in operating cost.
In all adverse effects, the IRR is well above the considered cost of capital. And the net present value remains above 36 million. Therefore, the project is
feasible to be implemented as it has significant net benefits and resistance to shocks.
Feasibility study for Foam Mattress and Foam Mattress
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Feasibility study for Foam Mattress and Foam Mattress
Material cost 90 4 36,807,561 19,299,395 24,045,274 28,845,174 33,618,057 38,390,940 33,126,805 33,126,805 33,126,805 33,126,805 33,126,805
Direct labor 30 12 230,200 230,200 230,200 230,200 230,200 230,200 230,200 230,200 230,200 230,200 230,200
Utility
30 12 436,500 436,500 436,500 436,500 436,500 436,500 436,500 436,500 436,500 436,500 436,500
Expenses
Overhead costs 30 12 33,905 33,905 33,905 33,905 33,905 33,905 33,905 33,905 33,905 33,905 33,905
Total Working
20,000,000 24,772,879 29,545,779 34,318,662 39,091,545 43,864,428 43,864,428 43,864,428 43,864,428 43,864,428
Capital
Incremental
4,772,879 4,773,900 4,772,883 4,772,883 4,772,883
WC - - - -
Description /Year Full Capacity Year-1 Year-2 Year-3 Year-4 Year-5 Year-6 Year-7 Year-8 Year-9 Year-10
Capacity 100% 40% 50% 60% 70% 80% 90% 90% 90% 90% 90%
Total Revenue 203,427,510 81,371,004 101,713,755 122,056,506 142,399,257 162,742,008 183,084,759 183,084,759 183,084,759 183,084,759 183,084,759
Total Revenue 203,427,510 81,371,004 101,713,755 122,056,506 142,399,257 162,742,008 183,084,759 183,084,759 183,084,759 183,084,759 183,084,759
Feasibility study for Foam Mattress and Foam Mattress
Revenue 81,371,004 101,713,755 122,056,506 142,399,257 162,742,008 183,084,759 183,084,759 183,084,759 183,084,759 183,084,759
Profit Before Tax 13,839,293 19,790,083 25,456,973 31,152,754 36,883,737 42,657,425 42,863,037 43,130,815 43,473,786 43,906,630
Profit Tax 4,151,788 5,937,025 7,637,092 9,345,826 11,065,121 12,797,228 12,858,911 12,939,245 13,042,136 13,171,989
Net Income After Tax 9,687,505 13,853,058 17,519,881 21,806,928 25,818,616 29,860,197 30,004,126 30,191,570 30,431,650 30,734,641
9. Sensitivity Analysis:
Item Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Sales Revenue 77,302,454 96,628,067 115,953,681 135,279,294 154,604,908 173,930,521 173,930,521 173,930,521 173,930,521 173,930,521
Total Cash Inflow 77,302,454 96,628,067 115,953,681 135,279,294 154,604,908 173,930,521 173,930,521 173,930,521 173,930,521 200,468,453
Operating Cost less Dep. & Int. 62,834,927 77,293,582 92,166,041 107,045,795 121,933,208 136,828,660 137,009,528 137,199,256 137,398,284 137,607,077
Replacement cost
-
Profit Tax 2,421,284 4,578,204 6,649,540 8,761,040 10,916,765 13,121,180 13,449,153 13,392,234 13,332,526 13,269,888
Total Cash Outflow 65,256,211 85,552,542 102,496,337 119,487,592 136,530,729 153,630,597 150,458,681 150,591,490 150,730,810 150,876,965
Net Cash Surplus/Deficit -41,593,850 12,046,243 11,075,526 13,457,344 15,791,703 18,074,178 20,299,925 23,471,841 23,339,032 23,199,712 49,591,488
Feasibility study for Foam Mattress and Foam Mattress
NPV 73,232,056
IRR 40%
Item Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Sales Revenue 81,371,004 101,713,755 122,056,506 142,399,257 162,742,008 183,084,759 183,084,759 183,084,759 183,084,759 183,084,759
Feasibility study for Foam Mattress and Foam Mattress
Working capital
20,000,000
Recovery
Total Cash
81,371,004 101,713,755 122,056,506 142,399,257 162,742,008 183,084,759 183,084,759 183,084,759 183,084,759 209,622,691
Inflow
Operating Cost
65,976,674 81,158,261 96,774,343 112,398,085 128,029,868 143,670,093 143,860,005 144,059,218 144,268,198 144,487,431
less Dep. & Int.
Replacement
costs - - - - -
Working Capital
3,680,756 3,680,756 3,680,756 3,680,756 3,680,756
Increment - - - -
Profit Tax 2,421,284 4,578,204 6,649,540 8,761,040 10,916,765 13,121,180 13,449,153 13,392,234 13,332,526 13,269,888
Total Cash
68,397,958 89,417,221 107,104,639 124,839,882 142,627,390 160,472,030 157,309,157 157,451,453 157,600,724 157,757,319
Outflow
Net Cash
-41,593,850 12,973,047 12,296,534 14,951,867 17,559,376 20,114,619 22,612,730 25,775,602 25,633,307 25,484,035 51,865,372
Surplus/Deficit
Feasibility study for Foam Mattress and Foam Mattress
Item Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Sales Revenue 81,371,004 101,713,755 122,056,506 142,399,257 162,742,008 183,084,759 183,084,759 183,084,759 183,084,759 183,084,759
Working capital
20,000,000
Recovery
Total Cash Inflow 81,371,004 101,713,755 122,056,506 142,399,257 162,742,008 183,084,759 183,084,759 183,084,759 183,084,759 209,622,691
Feasibility study for Foam Mattress and Foam Mattress
Replacement cost - -
- - -
Working Capital
3,680,756 3,680,756 3,680,756 3,680,756 3,680,756
Increment - - - -
Profit Tax 2,421,284 4,578,204 6,649,540 8,761,040 10,916,765 13,121,180 13,449,153 13,392,234 13,332,526 13,269,888
Total Cash
65,256,211 85,552,542 102,496,337 119,487,592 136,530,729 153,630,597 150,458,681 150,591,490 150,730,810 150,876,965
Outflow
Net Cash
-41,593,850 16,114,793 16,161,213 19,560,169 22,911,666 26,211,279 29,454,163 32,626,079 32,493,269 32,353,949 58,745,726
Surplus/Deficit
NPV 111,083,004
IRR 49%