5.

1 Cost of Project

Particulars Amount

1. Land & Site Development 2,10,00,000

2. Building and Civil works 1,50,00,000
3. Machinery 1,58,50,000
4. Pre-operative expense 5,00,000
5. Material Cost 2,88,000
6. Labor cost 63,60,000
7. Other Direct Cost 34,50,000
8. Factory Overhead cost 15,00,000
9. Other Utilities Cost 13,07,000
10. Indirect Material 14,25,000
11. Indirect Labor 25,20,000
12. Other Indirect Cost 8,00,000
Total: 7,00,00,000

5.1.1 Land & Site Development

We have selected a land for our factory and our head office which is 20 acres. As this
is our start up business we will expand our land in future.

Per decimal land costs = 50,000 BDT

So, Per Acre land costs 50,000*99 = 49,50,000 BDT

20-acres land costs = 20*49,50,000 = 9,90,00,000 BDT

This is our start up business, our amount of capital is insufficient just for now. We will
go for taking lease this land. We will take lease for 30 years which costs 20% of the
land cost. (Under the Transfer Property Act ,1882)

Lease Cost = (9,90,00,000 * 20)/100 = 1,98,00,000 BDT

5.1.1 Land and site development

Name (Amount BDT)

1. Land 1,98,00,000

2. Development of site 12,00,000

Total = 2,10,00,000

5.1.2 Building and Civil works

Name (Amount BDT)

1. Office 65,00,000

2. Factory 60,00,000

3. Storehouse 25,00,000

Total = 1,50,00,000
5.1.3 Plant and Machinery:

Particulars Quantity Amount (BDT)

1. Micro-Algae oil extraction 03 21,00,000
machine
2. Centrifugal separator 03 72,00,000
3. Refinery Machine 02 32,00,000
4. Generator 01 25,00,000
5. Turbines 70 3,50,000
Total = 1,58,50,000

5.1.4 Pre-operative expense

Title Amount (BDT)

1. License 3,50,000
2. Registration fees 1,50,000
Total = 5,00,000

5.1.5 Margin money for working capital

Title Amount (BDT)

Material Cost 2,88,000
Labor Cost 63,60,000
Other direct Cost 34,50,000
Factory Indirect Cost 15,00,000
Indirect labor 25,20,000
Other Indirect Cost 8,00,000
Other Utilities Cost 13,07,000
Total: 1,62,25,000
 5.2 Means of financing
The total amount of money invested in our business project is around 7,00,00,000 Taka.
Our Biofuel Company is a partnership company of 10 members consist.
Equity capital:
We, the 10 members of our company will provide 75% of our investment which is Tk.
5,25,00,000
Debt Capital:
The rest 25% which is Tk. 1,75,00,000 will be arranged by requiring loan from BRAC
bank against of 9% interest rate.

Financial Plan And Loan Requirement

Debt
25%
Equity
75%
Equity
Debt

Fig no: 05 Means of Financing

5.2.1 Capital Structure (Long Term):

Our main source and application of fund to start and run the business is bank loan and
cash from the members.

The total investment sources are figure out with the percentage amount:

 Bank Loan(initial)= Tk. 1,75,00,000

 Share member’s investment = Tk. 5,25,00,000

Loan repayment schedule

Year Principal Instalment Interest Principal Remaining

amount (9%) Balance
1. 1,75,00,000 44,98,715 15,75,000 29,23,715 1,45,76,285

2. 1,45,76,285 44,98,715 13,11,866 31,86,849 1,13,89,436

3. 1,13,89,436 44,98,715 10,25,049 34,73,666 79,15,770

4. 79,15,770 44,98,715 7,12,419 37,86,296 41,29,474

5. 41,29,474 44,98,715 3,71,652 41,27,062 ---

Table no: X Loan repayment schedule

5.2.2 Working capital requirements and its financing (Short Term):

Particular Equities (75%) Loan (25%) Total

Fixed Cost:

Land & Site 1,57,50,000 52,50,000

Development
Building and Civil 1,50,00,000
works
Machinery 1,58,50,000

Pre-operative 5,00,000
expense
Total Fixed Cost: 1,62,50,000 3,61,00,000 5,23,50,000

Working capital:

Material Cost 2,88,000

Labour cost 63,60,000

Other Direct Cost 34,50,000

Factory 15,00,000
Overhead cost
Other Utilities 13,07,000
Cost
Indirect Material 14,25,000

Indirect Labour 25,20,000

Other Indirect 8,00,000

Cost
Total Working 1,76,50,000
Capital:
Total: 7,00,00,000
 5.3 Cost of Production

5.3.1 Material Cost

Our production cost of per litter biofuel is 20 BDT. We need Algal media
and some fertilizer to grow up Algae in our pond. Our Production cost for
one year is 1,63,51,200 BDT.

Title Quantity Per litter Amount

(per cost (BDT)
month)
1. Algal media composition 72 L 4000 2,88,000
(contains nutrients, algae
growing mass)

5.3.2 Labor cost

Name Per Total worker Amount

Head(monthly) (Annually)

Labor (Pond) 10,000 15 18,00,000

Labor 12,000 20 28,80,000

(Machinery)
Engineer 35,000 4 16,80,000

Total: 63,60,000
5.3.3 Other Direct Cost

Name Amount
(Annually)

Administrative cost (10) 24,00,000

Insurance cost 2,00,000

Transportation cost 1,50,000

Depreciation 5,00,000

Interest expense 2,00,000

Total: 34,50,000

5.3.4 Factory Overhead Cost

Name Amount
(Annually)

Electricity 10,00,000

Water 5,00,000

Total: 15,00,000
5.3.4.1 Indirect Material

Title Quantity Amount (BDT)

1. Furniture 10 3,00,000
2. Air Conditioners 10 6,00,000
3. Computers 15 5,25,000
Total: 14,25,000

5.3.4.2 Indirect Labor

Title Number of Per head Amount (BDT)

labor Amount
(monthly)
Guards 10 8,000 9,60,000
Doorman 10 5,000 6,00,000
Driver 10 8,000 9,60,000
Total: 25,20,000

5.3.4.3 Other Indirect Cost

Name Amount (Annually )

Training cost 2,00,000
Maintenance cost 5,00,000
Telephone and Internet bill 1,00,000
Total: 8,00,000
 5.4 Income Statement (one year)

Particulars Taka Total Taka

Sales Revenue (6,81,300 liter Tk. 65 4,42,84,500

per unit)
Less: Cost of Production (COP)
Material Cost 2,88,000
Labor Cost 63,60,000
Other Direct Cost 34,50,000
Factory Overhead Cost 15,00,000
Total Cost of Production: (1,15,98,000)
Gross Profit: 3,26,86,500
Less: Operating Expense (OE)
Indirect Labor 25,20,000
Other Indirect Cost 8,00,000
Other Utilities Cost 13,07,000
Pre-Operative Expenses 5,00,000
Total Operating Expense: (51,27,000)
Earning Before Tax(EBT): 2,75,59,500
Less: Tax 35% (68,89,875)
Net Profit After Tax: 2,06,69,625
 5.5 Profitability Projection

Particulars Year-1 Year-2 Year-3 Year-4 Year-5

(20%) (25%) (35%) (45%)
Sales Revenue 4,42,84,500 5,31,41,400 5,53,55,625 5,97,84,075 6,42,12,525

Less: COP
Material Cost 2,88,000 3,45,600 3,60,000 3,88,800 4,17,600
Labor Cost 63,60,000 63,60,000 64,20,000 64,20,000 65,80,000
Direct Cost 34,50,000 40,00,000 45,00,000 52,00,000 56,00,000
Overhead Cost 15,00,000 20,00,000 25,00,000 30,00,000 35,00,000
Total (COP): (1,15,98,000) (1,27,05,600) (1,37,80,000) (1,50,08,800) (1,60,97,600)

Gross Profit 3,26,86,500 4,04,35,800 4,15,75,625 4,47,75,275 4,81,14,925

Less: OE
Indirect Labor 25,20,000 25,20,000 29,00,000 35,00,000 40,00,000
Indirect Cost 8,00,000 12,00,000 15,00,000 19,00,000 24,00,000
Utilities Cost 13,07,000 13,07,000 13,07,000 13,07,000 13,07,000
Operative Cost 5,00,000 5,00,000 5,00,000 5,00,000 5,00,000
Total (OE): (51,27,000) (55,27,000) (62,07,000) (72,07,000) (82,07,000)

(EBT): 2,75,59,500 3,49,08,800 3,53,68,625 3,75,68,275 3,99,07,925

Less: Tax (68,89,875) (87,27,200) (88,42,156) (93,92,068) (99,76,981)

(25%)
Net profit: 2,06,69,625 2,61,81,600 2,65,26,468 2,81,76,207 2,99,30,944