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Guidelines For FM Project: Stage 1
Guidelines For FM Project: Stage 1
(GROUP 6 STUDENTS)
STAGE 1
Prepare a Business Idea. Work out the details and determine the funds requirement and the
life of the project.
Minimum funding requirement should be of 50 lakhs
Life of the project should be minimum 5 years
STAGE 2
Based on the funds requirement determine the capital structure for your business. You can
choose from equity, preference shares, debentures, loans or hybrid financing and alternate
sources of financing.
Minimum 20% should be borrowed funds
Minimum 20% should be equity funds
STAGE 3
Based on your capital structure determine the cost of raising the capital (interest, dividend
and flotation cost) and calculate the overall cost pf raising the capital.
STAGE 4
Prepare a loan amortization schedule for the loan amount and calculate how much amount
goes towards interest repayment and capital repayment.
STAGE 5
Prepare projected operating statement for the life of the project (minimum 5 years) show the
EBIT-EPS relationship. Calculate operating, financial and combined leverage. (Excel
calculation compulsory)
STAGE 6
Calculate cash flows from the operating statement and find out NPV and IRR of the project to
determine whether the business proposal is profitable or not. (Excel calculation compulsory)
NOTE:
Project report will comprise of 100 marks.
You have to submit all stages together in form of a pdf file via Edmodo.
Submission Deadline - 15th May 2021.
FACULTY OF MANAGEMENT
Financial Management
Project Report