Section 1: Income Statement Assumptions

Assumption 1.3 Interest Rate

The interest rate rate to be used as a base for determining the

cost of capital for long-term debt is the recent KIBOR value
along with certain risk premium charged. It is a new business
that brings forward unique idea in the market for which
signifiacnt risk is posed. Project appraisal will be carried out at
KIBOR.

Assumption 1.4 Internal Growth Rate

The growth rate of sales is expected to be

around 7%.

Section 2: Balance Sheets Assumptions

Assumption 2.1 Initial Investment

The investment to be used for starting the business is one

billion PKR. 40% of this required capital will be raised in the
form of equity whereas the remaining 60% will be raied
through debt. The breakdown of the investment has been
shown in the given table.

Assumption 2.2 Fixed Asset Investment

Leisure and aqua resort is located at Panchor, 20 kilometers

outskirts from Mangla. The resort accomodates 30 families per
day
Assumption 2.3 Depreciation Table

The fixed assets will be depreciated based on their useful life

applying the straight line method. Table shows the useful life of
each item along with the depreciation that is to be charged
each year.

Assumption 2.4 Number of Shares

The number of shares have been

estaimted based on the ten ruppes par
value that is divided by the value of total
assets. The total number of shares have
been shown in the table shown.
Table 1.3 Interest Rate
KIBOR 10.93%
Risk Premium 4%
Interest Rate 14.925%

Table 2.1
Total Investment 1,000,000,000
Debt 600,000,000
Equity 400,000,000

Year 1 Year 2 Year 3

Land 261,300,000 209,040,000 156,780,000
Furniture & Fixture 16,463,500 13,170,800 9,878,100
Machinery & equipment 122,375,000 97,900,000 73,425,000
Office administration 18,009,500 14,407,600 10,805,700
Total Fixed Asset 418,148,000 334,518,400 250,888,800
 Item Cost Useful Life Annual Depreciation
Building 261,300,000 5 52,260,000
Furniture and Fixture 16,463,500 5 3,292,700
Machinery and Equipment 122,375,000 5 24,475,000
Office administration 18,009,500 5 3,601,900
Total 83,629,600

Book Value of Assets 1,000,000,000

Par Value 10
Number of Shares 100,000,000
Year 4 Year 5
104,520,000 52,260,000
6,585,400 3,292,700
48,950,000 24,475,000
7,203,800 3,601,900
167,259,200 83,629,600
Dining
Rooms for guests
Lobby
Kitchen
laundry area
Rooms for staff
Boating and Outdoor Activities Staff Room
Rooms for sweepers
Bonfire and BBQ Area
Terrace Grill (Outdoor Dining)
Daycare
Accounts/Admin Room
Owner / Manager Office
Manager and Admin accommodation
Security Guard Room
Medical Center
Saloon
Firing Range
Courtyard
Ramp
Parking
Swimming pool
Sauna Bath
Roads
Gym
Indoor Games Room
Store rooms
Lawn
ATV Bike Stadium
Astrotrough
Building Design
Registration
Land cost
Tube well
Network Tower
Land leveling
Operating Cost
Net Working Capital
Reserve
Insurance cost
SUB TOTAL

Guest room items

bed sets
sofa sets
Wifi device
Electric kettle
Mini fridge
Safe
Air conditioners
LED TV
Sports Equipments
Firing Range equipment
Hiking Equipment
Parasailing
Snorkling
Jet ski
ATV cord bike
Bicycle
Motorcycle 125
Snooker
Volley Ball Equipment
Life Jacket
Raft
Motor boat
Jeep Truck Vigo
Hiace Van
Sedan Corolla
Kitchen Equipments
Fridge
Deep freezer
Stove
Dough Machine
Pizza Oven
Conventional oven
Tandoor
Crockery
Miscellaneous Items
Oven
BBQ Grill
Microwave oven
Utensil set
Deep fryer
Meat Mincer
Overall Items
Water Dispenser
Geyser
Generator
Iron and accessories
Laundry machine
AC chillars (4 tons)
SUB TOTAL

Furniture set (Guest Room)

Table and Chair set for Dining hall/ Terrace
Table and Chair set for lawn
Lobby Area furniture
Gym Equipment
Saloom Equipment
Medical Equipment
Folding Beds outdoor
Staff Rooms Furniture
Fans
Electric Bulbs (18 Watt)
Internal Décor
SUB TOTAL

Telephones
Scanners
Laptop
WiFi Device
Printer
Miscellaneous Items
Employees Meal
SUB TOTAL

Security guards
Gardener
Receptionist
Manager
Electrician
Plumber
Staff for housekeeping
Helpers in kitchen
Waiters
Medical Staff
Saloon and daycare staff
Cooks
Activities incharge
Staff for laundary
SUB TOTAL

TOTAL COST

Rooms
deluxe
Snorkeling
Parasailing
ATV bike
Motor boat
Jet ski
Peter Boat
Hiking
Raft
Meals
Lunch
Dinner
 Total

Breakeven Analysis
Revenue Per Customer
Direct Cost
Contribution Margin
Fixed Costs
Breakeven Units
Breakeven Value
 Requirements for Land/Building
Estimated Area (Sq. ft.) Unit Cost (Rs./sq.ft)
1,100 3,500
5,400 4,000
650 3,500
324 4,500
110 3,500
180 3,500
144 3,500
100 3,500
2500 500
2000 1,500
600 3,500
155 3,500
200 3,500
100 3,500
200 3,500
180 3,500
900 3,500
250000 300
400 1,000
120 1,000
3000 1,000
392 12,000
200 5,000
224000 300
350 3,500
350 3,500
110 2,000
3000 500
2000 500
360 2,000
1 1500000
1 200000
348400 750
1 1000000
1 40000000
1 50000000
1 30000000
1 50000000
 1 100000000
1 50000000

Requirements for machinery

Quantity Per unit cost

65 155000
65 90000
6 4500
65 2000
65 20000
65 15000
65 110000
65 80000

1 20000000
40 3000
1 4000000
5 35000
5 1500000
7 50000
10 30000
2 120000
2 200000
5 5000
30 3500
2 1000000
2 2000000
2 9000000
2 7800000
2 4500000

3 70000
2 60000
4 15000
2 50000
1 300000
1 250000
1 50000
15 20000
 1 5000000
2 50000
2 80000
2 12000
15 2000
1 95000
1 24000

5 20000
5 30000
1 990000
2 5000
4 70000
5 300000

Requirements for Furniture/Fixture

Quantity Per Unit Cost (Rs.)

30 85000
40 30000
50 23000
5 20000
1 5000000
2 800000
1 500000
15 7000
25 100000
40 5500
110 350
1 1500000

Requirements for Office Equipments

Quantity Per unit cost (Rs.)

33 2500
2 10000
5 80000
 2 4500
3 6000
1 200000
80 216000

Requirements for employees

No. of Employees Monthly Salary

14 22,000
4 18000
4 30000
5 60000
5 18000
3 22000
8 22000
3 22000
16 22000
3 35000
6 35000
5 70000
6 35000
2 18000
84

Price per head Sessions per day Output per day Monthly sales
30000 70 2100000 63000000
45000 30 1350000 40500000
5000 11 55000 1650000
6000 15 90000 2700000
4000 15 60000 1800000
3000 30 90000 2700000
5000 48 240000 7200000
2000 15 30000 900000
2000 20 40000 1200000
14000 2 28000 840000

1000 100 100000 3000000

1500 120 180000 5400000
Analysis
44,100
25,800
18,300
123,389,600
6,743
297,348,708
Total Cost (Rs.)
3,850,000
21,600,000
2,275,000
1,458,000
385,000
630,000
504,000
350,000
1,250,000
3,000,000
2,100,000
542,500
700,000
350,000
700,000
630,000
3,150,000
75,000,000
400,000
120,000
3,000,000
4,704,000
1,000,000
67,200,000
1,225,000
1,225,000
220,000
1,500,000
1,000,000
720,000
1,500,000
200,000
261,300,000
1,000,000
40,000,000
50,000,000
30,000,000
50,000,000
100,000,000
50,000,000
784,788,500

Total Cost

10075000
5850000
27000
130000
1300000
975000
7150000
5200000

20000000
120000
4000000
175000
7500000
350000
300000
240000
400000
25000
105000
2000000
4000000
18000000
15600000
9000000

210000
120000
60000
100000
300000
250000
50000
300000
 5000000
100000
160000
24000
30000
95000
24000

100000
150000
990000
10000
280000
1500000
122375000

Total cost
2550000
1200000
1150000
100000
5000000
1600000
500000
105000
2500000
220000
38500
1500000
16463500

Total Cost
82500
20000
400000
 9000
18000
200000
17280000
18009500

Total Salary
3696000
864000
1440000
3600000
1080000
792000
2112000
792000
4224000
1260000
2520000
4200000
2520000
432000
29532000

971,168,500

Yearly sales Capacity percentage Year 1 Capacity percentage

756000000 55% 415800000 0.65
486000000 55% 267300000 0.65
19800000 55% 10890000 0.65
32400000 55% 17820000 0.65
21600000 55% 11880000 0.65
32400000 55% 17820000 0.65
86400000 55% 47520000 0.65
10800000 55% 5940000 0.65
14400000 55% 7920000 0.65
10080000 55% 5544000 0.65

36000000 55% 19800000 0.65

64800000 55% 35640000 0.65
863,874,000
 Initial investment 1 1000000000
Equity 0.4 400000000
Debt 0.6 600000000

Requirements
Loan 600000000
Markup 0.16
Loan tenure 5
Interest 0.08
No. of payments 10
Interest amount 96000000

tax 0.3

Item Cost Useful Life Annual Depreciation

Building 261,300,000 5 52,260,000
Furniture and Fixture 16,463,500 5 3,292,700
Machinery and Equipment 122,375,000 5 24,475,000
Office administration 18,009,500 5 3,601,900
Total 83,629,600
 22500
675000

8100000
45000

33750
1012500

12150000
400000 12000000 144000000 115200000
 Year 2 Capacity percentage Year 3 Capacity percentage
491400000 0.7 529200000 0.85
315900000 0.7 340200000 0.85
12870000 0.7 13860000 0.85
21060000 0.7 22680000 0.85
14040000 0.7 15120000 0.85
21060000 0.7 22680000 0.85
56160000 0.7 60480000 0.85
7020000 0.7 7560000 0.85
9360000 0.7 10080000 0.85
6552000 0.7 7056000 0.85

23400000 0.7 25200000 0.85

42120000 0.7 45360000 0.85
1,020,942,000 1,099,476,000
 Capacity percentage Year 5
642600000 1 756000000
413100000 1 486000000
16830000 1 19800000
27540000 1 32400000
18360000 1 21600000
27540000 1 32400000
73440000 1 86400000
9180000 1 10800000
12240000 1 14400000
8568000 1 10080000

30600000 1 36000000
55080000 1 64800000
1,335,078,000 1,570,680,000
 Loan Schedule
Instalment Opening Balance Instalment Principal
1 Rs. 600,000,000 Rs. 14,590,834 Rs. 6,590,834
2 Rs. 593,409,166 Rs. 14,590,834 Rs. 6,678,712
3 Rs. 586,730,454 Rs. 14,590,834 Rs. 6,767,762
4 Rs. 579,962,692 Rs. 14,590,834 Rs. 6,857,998
5 Rs. 573,104,694 Rs. 14,590,834 Rs. 6,949,438
6 Rs. 566,155,255 Rs. 14,590,834 Rs. 7,042,098
7 Rs. 559,113,158 Rs. 14,590,834 Rs. 7,135,992
8 Rs. 551,977,166 Rs. 14,590,834 Rs. 7,231,139
9 Rs. 544,746,027 Rs. 14,590,834 Rs. 7,327,554
10 Rs. 537,418,473 Rs. 14,590,834 Rs. 7,425,255
11 Rs. 529,993,218 Rs. 14,590,834 Rs. 7,524,258
12 Rs. 522,468,960 Rs. 14,590,834 Rs. 7,624,581
13 Rs. 514,844,379 Rs. 14,590,834 Rs. 7,726,243
14 Rs. 507,118,136 Rs. 14,590,834 Rs. 7,829,259
15 Rs. 499,288,877 Rs. 14,590,834 Rs. 7,933,649
16 Rs. 491,355,228 Rs. 14,590,834 Rs. 8,039,431
17 Rs. 483,315,797 Rs. 14,590,834 Rs. 8,146,624
18 Rs. 475,169,173 Rs. 14,590,834 Rs. 8,255,245
19 Rs. 466,913,928 Rs. 14,590,834 Rs. 8,365,315
20 Rs. 458,548,613 Rs. 14,590,834 Rs. 8,476,853
21 Rs. 450,071,760 Rs. 14,590,834 Rs. 8,589,877
22 Rs. 441,481,882 Rs. 14,590,834 Rs. 8,704,409
23 Rs. 432,777,473 Rs. 14,590,834 Rs. 8,820,468
24 Rs. 423,957,005 Rs. 14,590,834 Rs. 8,938,074
25 Rs. 415,018,931 Rs. 14,590,834 Rs. 9,057,249
26 Rs. 405,961,683 Rs. 14,590,834 Rs. 9,178,012
27 Rs. 396,783,671 Rs. 14,590,834 Rs. 9,300,385
28 Rs. 387,483,285 Rs. 14,590,834 Rs. 9,424,390
29 Rs. 378,058,895 Rs. 14,590,834 Rs. 9,550,049
30 Rs. 368,508,846 Rs. 14,590,834 Rs. 9,677,383
31 Rs. 358,831,463 Rs. 14,590,834 Rs. 9,806,415
32 Rs. 349,025,048 Rs. 14,590,834 Rs. 9,937,167
33 Rs. 339,087,881 Rs. 14,590,834 Rs. 10,069,663
34 Rs. 329,018,219 Rs. 14,590,834 Rs. 10,203,925
35 Rs. 318,814,294 Rs. 14,590,834 Rs. 10,339,977
36 Rs. 308,474,317 Rs. 14,590,834 Rs. 10,477,843
37 Rs. 297,996,474 Rs. 14,590,834 Rs. 10,617,548
38 Rs. 287,378,926 Rs. 14,590,834 Rs. 10,759,115
39 Rs. 276,619,811 Rs. 14,590,834 Rs. 10,902,570
40 Rs. 265,717,240 Rs. 14,590,834 Rs. 11,047,938
41 Rs. 254,669,303 Rs. 14,590,834 Rs. 11,195,244
42 Rs. 243,474,059 Rs. 14,590,834 Rs. 11,344,513
43 Rs. 232,129,546 Rs. 14,590,834 Rs. 11,495,774
44 Rs. 220,633,772 Rs. 14,590,834 Rs. 11,649,051
45 Rs. 208,984,721 Rs. 14,590,834 Rs. 11,804,371
46 Rs. 197,180,350 Rs. 14,590,834 Rs. 11,961,763
47 Rs. 185,218,587 Rs. 14,590,834 Rs. 12,121,253
48 Rs. 173,097,334 Rs. 14,590,834 Rs. 12,282,870
49 Rs. 160,814,464 Rs. 14,590,834 Rs. 12,446,641
50 Rs. 148,367,823 Rs. 14,590,834 Rs. 12,612,597
51 Rs. 135,755,226 Rs. 14,590,834 Rs. 12,780,765
52 Rs. 122,974,462 Rs. 14,590,834 Rs. 12,951,175
53 Rs. 110,023,287 Rs. 14,590,834 Rs. 13,123,857
54 Rs. 96,899,430 Rs. 14,590,834 Rs. 13,298,842
55 Rs. 83,600,588 Rs. 14,590,834 Rs. 13,476,160
56 Rs. 70,124,428 Rs. 14,590,834 Rs. 13,655,842
57 Rs. 56,468,586 Rs. 14,590,834 Rs. 13,837,920
58 Rs. 42,630,666 Rs. 14,590,834 Rs. 14,022,425
59 Rs. 28,608,241 Rs. 14,590,834 Rs. 14,209,391
60 Rs. 14,398,850 Rs. 14,590,834 Rs. 14,398,850

Rs. 875,450,056 Rs. 600,000,000

 Interest Closing Balance Principle Interest
Rs. 8,000,000 Rs. 593,409,166
Rs. 7,912,122 Rs. 586,730,454
Rs. 7,823,073 Rs. 579,962,692
Rs. 7,732,836 Rs. 573,104,694
Rs. 7,641,396 Rs. 566,155,255
Rs. 7,548,737 Rs. 559,113,158
Rs. 7,454,842 Rs. 551,977,166
Rs. 7,359,696 Rs. 544,746,027
Rs. 7,263,280 Rs. 537,418,473
Rs. 7,165,580 Rs. 529,993,218
Rs. 7,066,576 Rs. 522,468,960
Rs. 6,966,253 Rs. 514,844,379 Rs. 85,155,621 Rs. 89,934,390
Rs. 6,864,592 Rs. 507,118,136
Rs. 6,761,575 Rs. 499,288,877
Rs. 6,657,185 Rs. 491,355,228
Rs. 6,551,403 Rs. 483,315,797
Rs. 6,444,211 Rs. 475,169,173
Rs. 6,335,589 Rs. 466,913,928
Rs. 6,225,519 Rs. 458,548,613
Rs. 6,113,982 Rs. 450,071,760 Interest
Rs. 6,000,957 Rs. 441,481,882 Principle
Rs. 5,886,425 Rs. 432,777,473
Rs. 5,770,366 Rs. 423,957,005
Rs. 5,652,760 Rs. 415,018,931 Rs. 99,825,448 Rs. 75,264,563
Rs. 5,533,586 Rs. 405,961,683
Rs. 5,412,822 Rs. 396,783,671
Rs. 5,290,449 Rs. 387,483,285
Rs. 5,166,444 Rs. 378,058,895
Rs. 5,040,785 Rs. 368,508,846
Rs. 4,913,451 Rs. 358,831,463
Rs. 4,784,420 Rs. 349,025,048
Rs. 4,653,667 Rs. 339,087,881
Rs. 4,521,172 Rs. 329,018,219
Rs. 4,386,910 Rs. 318,814,294
Rs. 4,250,857 Rs. 308,474,317
Rs. 4,112,991 Rs. 297,996,474 Rs. 117,022,457 Rs. 58,067,554
Rs. 3,973,286 Rs. 287,378,926
Rs. 3,831,719 Rs. 276,619,811
Rs. 3,688,264 Rs. 265,717,240
 Rs. 3,542,897 Rs. 254,669,303
Rs. 3,395,591 Rs. 243,474,059
Rs. 3,246,321 Rs. 232,129,546
Rs. 3,095,061 Rs. 220,633,772
Rs. 2,941,784 Rs. 208,984,721
Rs. 2,786,463 Rs. 197,180,350
Rs. 2,629,071 Rs. 185,218,587
Rs. 2,469,581 Rs. 173,097,334
Rs. 2,307,964 Rs. 160,814,464 Rs. 137,182,010 Rs. 37,908,002
Rs. 2,144,193 Rs. 148,367,823
Rs. 1,978,238 Rs. 135,755,226
Rs. 1,810,070 Rs. 122,974,462
Rs. 1,639,659 Rs. 110,023,287
Rs. 1,466,977 Rs. 96,899,430
Rs. 1,291,992 Rs. 83,600,588
Rs. 1,114,675 Rs. 70,124,428
Rs. 934,992 Rs. 56,468,586
Rs. 752,914 Rs. 42,630,666
Rs. 568,409 Rs. 28,608,241
Rs. 381,443 Rs. 14,398,850
Rs. 191,985 Rs. 0 Rs. 160,814,464 Rs. 14,275,547

Rs. 275,450,056
 principle -600000000
intersest 0.16
N 60
$96,013,027.19

Monthly R 0.013333333333

Year 1 Year 2 Year 3 Year 4 Year 5 Total

Rs. 89,934,390 Rs. 75,264,563 Rs. 58,067,554 Rs. 37,908,002 Rs. 14,275,547 Rs. 275,450,056
Rs. 85,155,621 Rs. 99,825,448 Rs. 117,022,457 Rs. 137,182,010 Rs. 160,814,464 Rs. 600,000,000
 INCOME STATEMENT
Years 1 % of sales
Revenues 863,874,000

Outdoor activities related expenses 172,774,800 0.2000

Machinery maintenance 172,774,800 0.2000
Cost of goods sold 345,549,600 2.0000
Gross Profit 518,324,400 0.6000

General administration & selling expenses

Staff uniform 840,000 0.0010
Petrol expense for Generator 10,800,000 0.0125
Electricity expense 14,400,000 0.0167
Gas expense 2,400,000 0.0028
Repair and Maintenance 1,000,000 0.0012
Travelling expense 400,000 0.0005
Communications expense (phone, internet, etc.) 720,000 0.0008
Office vehicles running expense 6,000,000 0.0069
Office expenses 1,200,000 0.0014
Marketingl expense Year 1 1,500,000 0.0017
Professional fees (legal, audit, consultants, etc.) 500,000 0.0006
Depreciation expense 83,629,600
Subtotal 123,389,600 0.1428
Operating Income 394,934,800 0.5

Financial cost 89,934,390

Earnings Before Tax 305,000,410

Tax 91,500,122.95

NET PROFIT/(LOSS) AFTER TAX 213,500,287

OME STATEMENT
2 3 4 5
1,020,942,000 1,099,476,000 1,335,078,000 1,570,680,000

204,188,400 219,895,200 267,015,600 314,136,000

204,188,400 219,895,200 267,015,600 314,136,000
408,376,800 439,790,400 534,031,200 628,272,000
612,565,200 659,685,600 801,046,800 942,408,000

992,727 1,069,091 1,298,182 1,527,273

12,763,636 13,745,455 16,690,909 19,636,364
17,018,182 18,327,273 22,254,545 26,181,818
2,836,364 3,054,545 3,709,091 4,363,636
1,181,818 1,272,727 1,545,455 1,818,182
472,727 509,091 618,182 727,273
850,909 916,364 1,112,727 1,309,091
7,090,909 7,636,364 9,272,727 10,909,091
1,418,182 1,527,273 1,854,545 2,181,818
1,772,727 1,909,091 2,318,182 2,727,273
590,909 636,364 772,727 909,091
83,629,600 83,629,600 83,629,600 83,629,600
130,618,691 134,233,236 145,076,873 155,920,509
466,741,127 502,644,291 610,353,782 718,063,273

75,264,563 58,067,554 37,908,002 14,275,547

391,476,564 444,576,737 572,445,780 703,787,725

117,442,969 133,373,021 171,733,734 211,136,318

274,033,595 311,203,716 400,712,046 492,651,408

 ASSETS
Year 0 Year 1 Year 2

Current assets
Cash & Bank 90,468,000 204,188,400

Total Current Assets 90,468,000 204,188,400

Fixed assets
Land 261,300,000 209,040,000
Furniture & Fixture 16,463,500 13,170,800
Machinery & equipment 122,375,000 97,900,000
Office administration 18,009,500 14,407,600

Total Fixed Assets 418,148,000 334,518,400

Intangible assets
Pre-operation costs 1,500,000
Legal, licensing, & training costs 200,000
Total Intangible Assets 1,700,000

TOTAL ASSETS 510,316,000 538,706,800

 BALANCE SHEET
Liabilities
Year 3 Year 4 Year 5
Liabilities & Shareholders' Equity

Accounts Payable

219,895,200 267,015,600 314,136,000 Loan

219,895,200 267,015,600 314,136,000 Total Liabilities

Shareholders' equity

156,780,000 104,520,000 52,260,000 Retained earnings

9,878,100 6,585,400 3,292,700
73,425,000 48,950,000 24,475,000
10,805,700 7,203,800 3,601,900

250,888,800 167,259,200 83,629,600 Total Equity

470,784,000 434,274,800 397,765,600 TOTAL CAPITAL AND LIABILITIES

 Liabilities & Shareholders' Equity
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

29,371,716 34,712,028 37,382,184 45,392,652 53,403,120

600,000,000 514,844,379 415,018,931 297,996,474 160,814,464 0

544,216,095 449,730,959 335,378,658 206,207,116 53,403,120

400000000 400000000 400000000 400000000 400000000

- 213,500,287 274,033,595 311,203,716 400,712,046

400,000,000 613,500,287 674,033,595 711,203,716 800,712,046

944,216,095 1,063,231,246 1,009,412,252 917,410,832 854,115,166

 Project Appraisal
Year 0 Year 1 Year 2
Net Income 1,000,000,000 213,500,287 274,033,595

Average Accounting Return Internal Rate of Return

AAR Avg NI/avg initial cost
Year
Avg NI 338420210.301687 0
avg IC 200,000,000 1
2
AAR 1.692101 3
4
Profitability Index 5

Year Discounted Cashflow IRR

0 (1,000,000,000)
1 387,839,356
2 387,110,015
3 365,181,715
4 373,118,829
5 374,681,738

Profitability Index 188.79%

Payback and Discounted Payback Period

Year Cashflow
0 (1,000,000,000)
1 445,239,581
2 510,173,837
3 552,503,061
4 648,059,257
5 747,088,355

Payback Normal Discounted

Years 2.08 2.6
 Year 3 Year 4 Year 5
311,203,716 400,712,046 492,651,408

Internal Rate of Return Net Present Value

Cashlow Year Discounted Cashflow

(1,000,000,000) 0 (1,000,000,000)
445,239,581 1 387,839,356
510,173,837 2 387,110,015
552,503,061 3 365,181,715
648,059,257 4 373,118,829
747,088,355 5 374,681,738

45% NPV 887,931,654

NPV is positive so project is acceptable

 Year Cashflow Depreciation Amortization EBIT*(1-T)
0 (1,000,000,000) -
1 213,500,287 83,629,600 85,155,621 276,454,360
2 274,033,595 83,629,600 99,825,448 326,718,789
3 311,203,716 83,629,600 117,022,457 351,851,004
4 400,712,046 83,629,600 137,182,010 427,247,647
5 492,651,408 83,629,600 160,814,464 502,644,291

Interest rate 15%

 OCF
(1,000,000,000)
445,239,581
510,173,837
552,503,061
648,059,257
747,088,355
 PROFITIB
Category 1

Category 2

SHORT TERM S

FINANCIAL LE
 Ratio Analysis

PROFITIBILITY
Year 1 Year 2 Year 3
Profit Margin 25% 27% 28%
Gross Profit 60% 60% 60%
Operating Profit/ EBIT Margin 46% 46% 46%

Return on Equity 53% 69% 78%

Return on Capital Employeed 36% 66% 104%
Return on Assets 42% 51% 66%

SHORT TERM SOLVENCY

Year 1 Year 2 Year 3
Current Ratio 3.0801 5.8824 5.8824
Networking Capital 61,096,284 169,476,372 182,513,016
Networking Capital to total assets 0.11972 0.3146 0.3877

FINANCIAL LEVERAGE
Total Debt 544,216,095 449,730,959 335,378,658
Total Asset 510,316,000 538,706,800 470,784,000
Debt Ratio 1.0664 0.8348 0.7124
Total Asset 510,316,000 538,706,800 470,784,000
Total equity 400,000,000 613,500,287 674,033,595
Equity multiplier 1.2758 0.8781 0.6985
EBIT 394,934,800 466,741,127 502,644,291
Interest Expense 89,934,390 75,264,563 58,067,554
Times Interest Earned Ratio 4.391366 6.201340 8.656199
Cash 90,468,000 204,188,400 219,895,200
Interest Expense 89,934,390 75,264,563 58,067,554
Cash Coverage Ratio 1.00593 2.71294 3.78689
 Year 4 Year 5
30% 31%
60% 60%
46% 46%

100% 123%
249% 171862738872%
92% 124%

Year 4 Year 5
5.8824 5.8824
221,622,948 260,732,880
0.5103 0.6555

206,207,116 53,403,120
434,274,800 397,765,600
0.4748 0.1343
434,274,800 397,765,600
711,203,716 800,712,046
0.6106 0.4968
610,353,782 718,063,273
37,908,002 14,275,547
16.100922 50.300227
267,015,600 314,136,000
37,908,002 14,275,547
7.04378 22.00518
 Breakeven Analysis Interpretation of Break

Revenue Per Customer 44,100

Direct Cost 25,800
Contribution Margin 18,300 It is assumed that that rooms, l
Fixed Costs 123,389,600 mandatory whereas the remain
Breakeven Units 6,743 used by 10% of vi
Breakeven Value 297,348,708
Direct costs will be around 30% f
activities and 50% f
 Interpretation of Breakeven
Analysis

It is assumed that that rooms, lunch and dinner are

mandatory whereas the remaining faciliteis will be
used by 10% of visitors.

Direct costs will be around 30% for rooms, 5% for the

activities and 50% for food.
 Normal Case 10% Increase 10% Decrease Best Case
Units Sold 19,589 21,548 17,630 21,548
Direct Cost 25,800 28,380 23,220 23,220
Selling Price 44,100 48,510 39,690 48,510
Fixed Costs 123,389,600 135,728,560 111,050,640 111,050,640

Normal Case
1 2 3 4
Revenue 863,874,000 916,224,764 971,747,985 1,030,635,913
Direct Cost 505,395,673 536,022,651 568,505,624 602,957,065
Gross Profit 358,478,327 380,202,113 403,242,361 427,678,848
Fixed Cost 408,646,656 (50,168,329) (50,168,329) (50,168,329)
Operating Profit (50,168,329) 430,370,443 453,410,691 477,847,178
Tax Rate (15,050,499) 129,111,133 136,023,207 143,354,153
Net Profit (35,117,831) 301,259,310 317,387,483 334,493,024

Best Case
1 2 3 4
Revenue 1,045,287,540 1,108,631,965 1,175,815,062 1,247,069,455
Direct Cost 500,341,717 530,662,425 562,820,568 596,927,494
Gross Profit 544,945,823 577,969,540 612,994,494 650,141,961
Fixed Cost 48,510 163,469,194 163,469,194 163,469,194
Operating Profit 544,897,313 414,500,346 449,525,300 486,672,767
Tax Rate 163,469,194 124,350,104 134,857,590 146,001,830
Net Profit 381,428,119 290,150,242 314,667,710 340,670,937

Worst Case
1 2 3 4
Revenue 699,737,940 742,142,059 787,115,868 834,815,090
Direct Cost 500,341,717 530,662,425 562,820,568 596,927,494
Gross Profit 199,396,223 211,479,634 224,295,300 237,887,595
Fixed Cost 39,690 163,469,194 163,469,194 163,469,194
Operating Profit 199,356,533 48,010,440 60,826,106 74,418,401
Tax Rate 59,806,960 14,403,132 18,247,832 22,325,520
Net Profit 139,549,573 33,607,308 42,578,274 52,092,881
Worst Case
17,630
28,380
39,690
135,728,560

Year Normal Case Best Case

5 0 (1,000,000,000) (1,000,000,000)
1,093,092,449 1 (35,117,831) 381,428,119
639,496,263 2 301,259,310 290,150,242
453,596,186 3 317,387,483 314,667,710
(50,168,329) 4 334,493,024 340,670,937
503,764,516 5 352,635,161 368,249,959
151,129,355
352,635,161
$270,657,148 $695,166,967

5
1,322,641,864
633,101,300
689,540,563
163,469,194
526,071,369
157,821,411
368,249,959

5
885,404,884
633,101,300
252,303,584
163,469,194
88,834,390
26,650,317
62,184,073
 Worst Case
(1,000,000,000)
139,549,573 r 15%
33,607,308
42,578,274
52,092,881
62,184,073

($669,987,890)
 Weighted Average Cost of Capital
Particulars Value Cost of Debt
Market Value of Equity 400,000,000 Take same as the interest rate
Market Value of Debt 600,000,000 Kd 0.14925
Total Weight 1,000,000,000
Cost of Equity 21.33% Cost of Equity
Cost of Debt 14.92% Risk Free Rate
Corporate Tax Rate 30% Market Return
Weight of Debt 0.6 Risk Beta
Weight of Equity 0.4 Ke

WACC 15%
al
Cost of Debt
e as the interest rate

Cost of Equity
10.93% Beta taken of competitor is 1.87. One is
added to account for risk of new business.
14.55% Ten year retunr of KSE-100 is taken as
2.87 market return
21.3%