Rift Valley University Gulelle Campus

Second Year MBA Students: Group Assignment

Course: Project Analysis and Management (MBA 731)

Project Identification and Project Preparation

On
“TMS Smart Car Parking and Electric Vehicles
Charging Project”

Submitted to:
Bonson Alemu (Ass. Professor)
Submitted by:
Takele Regassa (ID No 0048/21)
Mekonnen Jaleta (ID No 0183/21)
Seyoum Hailu (ID No 0046/21)

September 2022

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 TABLE OF CONTENT
TITLE PAGE
I. PROJECT IDENTIFICATION................................................................................................................. 3

1.1. STAKEHOLDERS ANALYSIS....................................................................................................................3

1.2. SWOT ANALYSIS..................................................................................................................................4
1.3. PROBLEM ANALYSIS.............................................................................................................................5
1.4. OBJECTIVE TREE ANALYSIS..................................................................................................................6

II. FEASIBILITY STUDY............................................................................................................................. 7

2.1. INTRODUCTION.....................................................................................................................................7
2.2. PRODUCT DESCRIPTION........................................................................................................................7
2.3. MARKET ANALYSIS...............................................................................................................................8
2.3.1. Demand for Parking....................................................................................................................8
2.3.2. Supply of Parking........................................................................................................................8
2.3.3. Marketing and Promotion strategy..............................................................................................9
2.3.4. Product Pricing...........................................................................................................................9
2.4. TECHNICAL ANALYSIS........................................................................................................................10
2.5. ORGANIZATION, MANAGEMENT AND MANPOWER..............................................................................13
2.5.1. Organizational Structure...........................................................................................................13
2.5.2. Management..............................................................................................................................14
2.5.3. Manpower requirement availability...........................................................................................14
2.5.4. Training.....................................................................................................................................14
2.6. POLITICAL LEGAL ANALYSIS...............................................................................................................15
2.7. FINANCIAL ANALYSIS.........................................................................................................................15
2.7.1. Investment Outlay......................................................................................................................15
2.7.2. Source of Finance......................................................................................................................15
2.7.3. Financial Results.......................................................................................................................16
2.8. ECONOMIC ANALYSIS.........................................................................................................................17
2.9. SOCIAL ANALYSIS...............................................................................................................................18
2.10. ENVIRONMENTAL ANALYSIS...............................................................................................................18
2.11. CROSS CUTTING ISSUES......................................................................................................................18
2.12. SOCIO – ECONOMIC BENEFITS............................................................................................................19
2.13. CONCLUSION AND RECOMMENDATION..................................................................................20
2.13.1. Conclusion.................................................................................................................................20
2.13.2. Recommendation.......................................................................................................................21
2.14. ANNEXES............................................................................................................................................22

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 I. PROJECT IDENTIFICATION

The first and one of the critical steps in the project cycle management is the identification and
selection process. This is an important stage such that it can affect the whole process
including that of sustainability of the project after completion and transferring to operational
phase.

Project Identification and selection is a process to assess each project idea and select the
project with the highest priority. The process starts with the generation of a product idea. In
order to select the most promising project the entrepreneur needs to generate a few ideas
about the possible projects.

Our group conducted a two day session for brainstorming and idea generation on the project
to be dealt with in the given assignment.

The group identified the following project ideas based on observation and preliminary
assessment:

 Bakery Project,
 Solid Waste Marketing Project, and
 Smart Car Parking and Electric Vehicles Charging Project

Our group selected the third project, Smart Car Parking Project, to further analyze and assess
is viability and named the project as TMS Smart Car Parking and Electric Vehicles
Charging Project.

I.1. Stakeholders analysis

Involving key partners in the early stages of project planning helps ensure commitment and
ownership. This can help minimize tensions later on and has the added benefit that it pools
knowledge and experience; helping to ensure the plan is as robust as possible.

Our Smart Parking and Electric Vehicles Charging Project is planned to be established in
Addis Ababa City at selected sub cities of Addis Ketema sub city (around merkato), Yeka
sub-city (around Megenaga) and Bole Sub-city (around Ednamol) for the first phase of our
project.

The project is planned to be established in collaboration with commercial building owners

may be in or near their compound.

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Our stakeholders will be commercial building owners, transport office, Traffic office,
Ethiopian Electric Utility, Ethno- telecom, trade office, banks etc.

Stakeholder Interest Impact Value Power Impact Value Relative Strategy

Priority
Commercial high high 4 high high 4 16 Keep
building owners satisfied
Mange
closely
Addis Ababa City Low Low 2 high high 4 8 Keep
Transport Satisfied
Authority
Addis Ababa Low Low 2 high high 4 8 Keep
Road Traffic Satisfied
Management
Agency
Ethno- telecom high high 4 Low Low 2 8 Keep
informed
Ethiopian Electric high high 4 Low Low 2 8 Keep
Utility informed
Environmental high high 4 Low Low 2 8 Keep
Authorities informed
Banks high high 4 Low Low 2 8 Keep
informed
I.2. SWOT analysis

According to Wikipedia, SWOT analysis is defined as a strategic planning and strategic

management technique used to help a person or organization identify Strengths, Weaknesses,
Opportunities, and Threats related to business competition or project planning. It is
sometimes called situational assessment or situational analysis. Accordingly, the SWOT
analysis of TMS Smart Parking Project is tabulated as follows.

Strengths
 Competent and committed with
management skill
 Adequate initial capital
 Competitive prices
 New technology or app to administer the
parking
Opportunities
 Availability of technology or new apps
to run the business,
 Government support,
 Opportunity for expansion,
 Advancement of construction
technologies to establish smart parking,
 Online experience sharing
Weaknesses
 New/start up business
 No own project land
Threats
 Competition from traditional parking
systems and new entrants to the smart
parking,
 Electric power/network interruptions,
 New to service users
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 I.3. Problem analysis

A Problem Tree Analysis is a pictorial representation of a problem, its causes and its
consequences. This analysis tool helps the project team get a quick glance of how a range of
complex issues contribute toward a problem and how this problem branches out into a set of
consequences. Both causes and consequences are fitted into the diagram on a hierarchical
preference basis.

Accordingly, the problem tree diagram of TMS Smart Parking Project is tabulated as
follows.

Traffic congestion Time waste looking Fuel cost wondering

of parking for parking

Lack of car parking

lot

Increase in Weak Limited number of

number of cars management of off road parking
existing parking areas

Increase in Increase in per

urban capita income

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 I.4. Objective tree analysis

An Objective Tree is a Problem Tree that is transformed into a set of future solutions to the
problems. Each negative problem is converted into an objective by rewriting it as a positive
future statement

Accordingly, the objective tree diagram of TMS Smart Parking Project is tabulated as
follows.

Reduced traffic Reduced time waste Reduced fuel cost

congestion looking of parking wondering for parking

Improved availability of car parking lot

Increase in Improved Increased number of

number of cars management of off road parking
existing parking area areas

Increase in Increase in per

urban capita income

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II. FEASIBILITY STUDY

II.1. Introduction

Over the decades our country has been developed drastically, now we are in this state that we
have a lot of well contacted roads, commercial building and increasing number of
automobiles. While parking these automobiles in parking space we use the manual procedure
of parking. Which most of the cases is unplanned and lack of discipline due to this, people
can park their cars anywhere they want to, which creates a mess as people do not follow the
particular cue most of the time. As a result of this, a huge traffic jam takes place in that place.
While parking in and retrieving car due mismanagement cars can get dent by bumping with
each other as there is lack of sufficient space. This leads to arguments, fights among people
which sometimes make huge traffic jam. This is also an economical loss as we need to repair
our damaged car and also cars consume extra fuel while parking in or out. Traffic jam is an
issue here as it kills our precious time. Due to this chaos in parking our valuable time gets
wasted. It harms the students, office going staffs and emergency patients to a great extent.

It also causes economical loss to commercial places like shopping malls, amusement parks as
people are more likely not to visit these places due to this parking hazard. As we are
advancing with time, the manual car parking system in commercial spaces is creating hurdle
which is causing wastage of time and some economic losses as well.

To solve these problems we are introducing new car parking system called Smart Car Parking
System which can also give charging services for electrical vehicles. This is a project
feasibility study that envisages the establishment of Smart Car Parking and Electric Vehicle
charging project to be established in Addis Ababa City with the capacity of parking 140
vehicles at a time for every parking lot.

The plan of the promoter is to establish smart parking project at three selected sites in Yeka,
Addis Ketema and Bole sub cites for the first phase of the project.

II.2. Product Description

The envisaged smart parking system is availed by constructing vertical tower of steel
structure which is planned to occupy 20 vehicles of sedan type or SUVs and spaces for
elevator equipment at the top. The vertical elevator lands on about 50m2 of land with a height

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of about 34 meters. The planned project will have 7 (seven) vertical towers in three selected
sub-cities in the capital with total space capacity of 140 for parking.

The system works as follows: The driver will place the vehicle in front of the garage door and
there will be a monitor available where the number of available parking slots will be
displayed. The user will have to provide his mobile phone number and car’s registration
number and the operator will give command to open the gate, a car parking tray will come &
will park the car in the garage. The user will receive a SMS which will contain a code. After
the car is parked a time counter will count the amount of money to be deducted till the car is
parked out. While parking out the driver will have to provide the code to the operator at the
exit gate. The user will receive a SMS stating the amount to be paid. After paying the amount
the car parking tray will park out the car using the same process it was parked out.

II.3. Market analysis

II.3.1. Demand for Parking

Parking plays an important role in mobility, access and the economic development of Addis
Ababa. Now a day, parking in the city of Addis Ababa is becoming a crucial service, this is
due to rapid growth of vehicles and the demand for parking is increasing.

Large increases in the number of vehicles with lack of sufficient parking spaces in the city
have led to severe parking problems with increasing car ownership resulting in vehicular
traffic congestion. The increasing population and expanding urban center has been
accompanied by increasing car ownership in developed and developing countries. As
provided by Federal Transport Authority, in 2011 the number of vehicles operating in Addis
Ababa was 260,837 which increased to 447,669 in 2016 with annual average increase of 11.4
percent indicating significant mobility increase. Based on this information the number of
vehicles in the city is estimated to be about 855,595 by 2022 and projected to reach 1.4
million by 2027.

II.3.2. Supply of Parking

Regarding the supply of car parking services in Addis Ababa, most of the parking services
are on-street parking. Most of the on-street parking are non-formal and illegal where the
safety of the cars left be in question. On the other hand, there are few on-street parkings
belonging to business organizations, banks, government offices, hospitals, universities etc.

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Modern parking system has also been started in Addis Ababa by the government. One of
them is the Megenagna smart parking garage can accommodate up to 90 cars at a time, in
slots stacked 15 storeys high in the building and that of Merkato has a capacity of
accommodating 80 cars at a time. The other is, the Meskel Square Underground Parking Lot
has the capacity to accommodate about 1,400 vehicles at once.

Despite the above mentioned supply attempts, the problem of parking in Addis Ababa, the
capital of our country and the hub of many international diplomatic centers remained
constrained by lack of modern parking system.

The project under review has the vision and commitment to contribute is part in modernizing
the car parking system of Addis Ababa.

II.3.3. Marketing and Promotion strategy

In order to penetrate and gain considerable market share, one of the major marketing
strategies for the project is consistently rendering quality and reliable service to its clients.
Due emphasis must be placed on improving quality of service and facilities. The major
marketing strategies to promote the project and gain considerable market share include:

 Advertising through different means focusing on the existing service and facilities,
 Promote in association to the key location and nearby business,
 Working on sustained promotional work,
 Working on public relations to reach and influence key personas and organization
with a capacity of making decision,
 Keeping the quality of its service/ facilities and consistently improving with changing
situations,
 Seasonal discount pricing different others customer centric marketing strategies will
be used by the company.

II.3.4. Product Pricing

The envisaged project will have to products: namely, vehicle parking service and electric
vehicle charging service. Vehicles that use electric charging services pay for both parking and
charging facilities.

The detail pricing of the pricing is presented below:

Table 2.1: Product pricing

Product Product mix Selling Price (Birr/hr)

Parking Service 70%
50
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 Parking & Electric 30%
vehicle charging 120
Total 100%

NB: vehicles using electric charge will stay parked for about 4 hours.

II.4. Technical analysis

The envisaged project is planned to be in Addis Ababa city Administration. In the first phase of the
project the vertical parking towers will be installed at three selected location specifically, Megenaga,
Bole and Merkato. The tenure of the project will be on the land of the existing commercial buildings
near or in their own compound.

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Fig; 1 Design for the planned smart parking system

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The technical specification of the technology is presented in the under depicted figure:

The technology owner is Tedra Automotive Solutions Pvt. Ltd., an Indian known company. Tedra
automotive is a pioneer in automated car park systems that are fully customized and suitable for all
types of passenger vehicles. Tedra offers a diverse array of parking solutions for all residential and
commercial requirements, with state-of-the-art products that match international quality standards.

Address of the technology Owner

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 II.5. Organization, Management and Manpower

The organizational structure is an organization’s skeleton which defines the roles and
departments that makes up an organization’s functioning and shows how everything fits
together in a whole.

Organizational structure depicts the relationship among those involved and their various
levels of authority and responsibility so as to execute organizational duties.

II.5.1. Organizational Structure

The overall oversight of the factory will be shouldered by the General Manager which is
accountable to board at the top. The General Manager will be responsible for the overall
management of the project.

The organizational structure proposed for the envisaged factory comprises four departments
under the supervision of the General Manger. These include: Administration & Finance,
Sales & Technical and Customer Desk.

The organizational structure of TMS Smart Parking and Electric Vehicle Charging Project
is depicted below:

Board

General
Manager

Sells and Customer

Adminstratio desk
Technical
n & Finance

Administrati Compiant
on
Finance Service Sell Technical Reception
handling

Fig 6.1 Organizational Structure

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 II.5.2. Management

The assigned general manager of the project under review is Ato Takele Regassa who is
well qualifies and experienced one with clear vision and strong commitment to realize the
objectives of the project.

Other management positions will be filled by staff to be recruited based on sufficiency of

education and experience in the business to lead the project so as to ensure successful
implementation of the project and realization of the targeted objectives.

II.5.3. Manpower requirement availability

Having effective and efficient human resource development is an important factor for the
success of any business. The required human resource for the envisaged project easily be
source The envisaged project needs human resources of various educational qualifications
and level of experience.

The total human resource requirement of the project will be 35 permanent employees at full
capacity operation with annual salary of Birr 2,689,200 and other employee benefit
packages.

The detail human power requirement, job specification and associated budget requirement
is annexed.

II.5.4. Training

Training of human resource is crucial to be competitive in delivering customers the service

to be best standard.

The project planned to train its employees and allocated a budget of Birr 268,920.

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 II.6. Political legal analysis

Ethiopia is pursuing and promoting free market economy. The Ethiopian government has
demonstrated a strong commitment to the private sector, which has helped paved the way
for the country's remarkable economic progress.

According to the Federal Democratic Republic Of Ethiopia, Ministry Of Transport

Transport Policy of Addis Ababa, 2011, it is clearly stated that the Government shall
encourage the private sector partnership to develop parking facilities and enhance their
participation in transport service.

II.7. Financial analysis

II.7.1. Investment Outlay

The total investment cost of the project including working capital is estimated at Birr 42.1
million. From the total investment cost, Birr 26.9 million or 64% is required in foreign
currency. The detail is presented in the table below:

Table 2.1: Initial investment cost with FX requirement

Description Foreign Cost Local Cost Total (Birr)
Building and Construction 15,296,782.50 6,999,778.15 22,296,560.65
Machinery & Equipment 11,646,316.53 - 11,646,316.53
Furniture and Equipment - 377,617.30 377,617.30
Electric power installation - 2,800,000.00 2,800,000.00
Sub Total 26,943,099.03 10,177,395.45 37,120,494.48
Working Capital - 710,534.67 710,534.67
Sub Total - 710,534.67 710,534.67
Pre-production interest 3,527,413.62 3,527,413.62
Pre-production Cost 530,000.00 - 530,000.00
Sub Total 4,057,413.62 - 4,057,413.62
Total 12,493,329.29 29,395,113.47 41,888,442.77
Share (%) 64% 36% 100%
II.7.2. Source of Finance

The plan of the promoter is to finance the project from its own source and bank loan. From
the total investment cost of Birr 41.89 million, Birr 29.4 million or 70% will be bank loan
while the remaining Birr 12.49 million or 30% will be covered by the promoter company
from its own source as equity contribution. The detail is presented in the table below:

Table 6.2: Fund Allocation and Sources of Fund

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 Description Owner's equity Bank Loan Total (Birr)
Building and Construction 6,688,968.20 15,607,592.46 22,296,560.65
Machinery & Equipment 1,746,947.48 9,899,369.05 11,646,316.53
Furniture and Equipment - 377,617.30 377,617.30
Electric power installation - 2,800,000.00 2,800,000.00
Sub Total 8,435,915.68 28,684,578.81 37,120,494.48
Working Capital - 710,534.67 710,534.67
Sub Total - 710,534.67 710,534.67
Pre-production interest 3,527,413.62 3,527,413.62
Pre-production Cost 530,000.00 - 530,000.00
Sub Total 4,057,413.62 - 4,057,413.62
Total 12,493,329.29 29,395,113.47 41,888,442.77
Debt/Equity Ratio 30% 70% 100%

II.7.3. Financial Results

a) Profitability

Based on the projected profit and loss statement, the project will generate a profit
throughout its operation life. Annual net profit after tax will grow from Birr 16,927,893 to
Birr 18,297,479 during the life of the project.

b) Liquidity

The cumulative cash inflow projection of the project shows a positive growth in cash
balance from Birr 6,137,492 in the first year to Birr 94,901,043 in the last projection period
implying that the project will not face liquidity constraint to finance its operational cost
meeting at the same time its debt obligation.

c) Financial Internal Rate of Return

Before and after tax internal rate of return computed based on 10 years projection period is
61% and 57%, where the rate is above the cost of debt of 12% implying the project’s
viability to cover what is invested during its life span after paying its cost of debt.

d) Sensitivity Analysis

The project's sensitivity to adverse circumstance is viewed from three different scenarios:
by decreasing its sales revenue; increasing its investment cost and operating cost, all by
10%. The result indicates that FIRR after tax decreases to 40% with decrease in revenue,
45% with increase in operating cost and to 51% with an increase in investment cost.

Financial sensitivity analysis shows that the project is highly sensitive to decrease in sales
revenue but relatively less sensitive to increase in investment costs. Therefore, it is

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recommended that the company should give due attention for the possible reasons for sales
reduction.

e) Net Present Value

Net present value (NPV) is used to calculate the current value of a future stream of
payments from a company, project, or investment.

Net present value shows how much money a project or investment will gain or lose in
terms of today's funds. Future cash flow doesn't closely reflect current cash flow of a
project because of the impact of factors such as inflation and lost compound interest, so
NPV adjusts accordingly.

The NPV of the envisaged project at 10% discount rate is Birr 94,508,139 which is quite
attractive and worth investing.

f) Pay-Back period

The payback, also called pay-off period, is defined as the period required recovering the
original investment outlay through the accumulated net cash flows earned by the project.

The payback period is useful if a new project would have to expect rapid technological
change in the sector, in particular when the technological life cycle is much shorter than the
technical life cycle of the project or its main components.

The project under view has short pay-back period which is 2 years. The detail is annexed.

II.8. Economic analysis

In a vertical parking system, cars are vertically stacked using an electrical control system.
This means a greater number of cars can be accommodated in the same amount of space.
The area thus saved can be then utilized for other productive uses.

This smart parking has many benefits. The benefits include:

 It contributes to carbon emissions reduction and air quality improvement by

alleviating traffic congestion,
 Reduces fuel cost that drivers incur in search for vacant parking,
 Saves drives from penalty by traffic polices as a result of parking at prohibited area,
 Free roads and pedestrians walk ways and thereby reduce traffic accidents,
 The envisaged project will create job opportunity for 35 permanent employees.
 Protect the vehicle owners from theft, and
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  Keep safety of the vehicles from sun, rain and dust.

II.9. Social analysis

As stated above, smart parking system has many social and economic benefits. To touch
again the main social benefits, it:

 Increases personal safety at night,

 Reduces accidents and car damage,
 Reduces impact on historic areas and buildings,
 Minimizes theft
 Increases safety for pedestrians and cyclists
 Reduces noise impact and pollution, acoustic and vibrational impacts
 Provides options such as storage pods or provision for cyclists’ bike storage
 Provides convenience through intelligent software that allows for scheduled vehicle
retrieval and optimized waiting times, and
 Saves users the time of having to drive through a garage to find a space, park and
walk out

II.10. Environmental analysis

Another benefit of smart parking is that it reduces carbon emissions from vehicles by
decreasing the congestion and mobility of the vehicles in search of parking. When the
drivers move from one place to another for parking, this enhances the individual
environmental footprint.

II.11. Cross cutting issues

The project will provides accessible parking for all users including disabled and parents
with children,

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 II.12. Socio – Economic Benefits

 The project under review has significant importance in creating employment

opportunity of the citizens. The project will create employment opportunity for
additional 35 permanent workers.

 The project will contribute to the government treasure in the form of profit tax which
amounts to Birr 5,315,787 on average every year.

 The project has also significant role to play in supporting people with physical disability
who suffer due absence proper parking designed for them accordingly,

 The has significant role in building the image of the city by making roads and
pedestrian walk ways,

 The project has also a significant role to play in technological transfer, and

 The parking project also minimizes needless fuel consumption has drivers consume
while seeking for idle parking.

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 II.13. CONCLUSION AND RECOMMENDATION

II.13.1. Conclusion

Now day vehicle parking is an important issue and day by day its necessity is increasing. In
Addis Ababa we are still using the manual vehicle parking system and that is why we are
facing problems like wastage of time and fuel finding free space around the parking ground
when we need to park our car which requires due attention. Another issue is chaos that
happens while parking because there is no particular system anyone can park anywhere that
sometime causes damage to the vehicles while moving out or in the parking lot. Security is
also an issue there for on-street parking.

The assessment conducted indicated that there is huge gap between demand and supply of
parking system in our capital, which is also the hub and head quarter for various regional and
international organizations. The government tries to introduce modern parking systems so as
to curb the problem but still gaps are widening.

Our project planned to introduce smart parking system which also gives charging services for
electric vehicle while parking simultaneously.

The envisaged smart parking system is availed by constructing vertical tower of steel
structure which is planned to occupy 20 vehicles of sedan type or SUVs and spaces for
elevator equipment at the top. The vertical elevator lands on about 50m2 of land with a height
of about 34 meters. The planned project will have 7 (seven) vertical towers in three selected
sub-cities in the capital with total space capacity of 140 for parking.

The total investment cost of the project including working capital is estimated at Birr 42.1
million. The project found to be financially viable, economically viable and socially
desirable.

The project under review designed well aligned organizational structure and appointed a
visionary and young vibrant General Manaer, Mr. Takele Regassa, who is well qualified and
experienced. Job specification is prepared for recruitment and selection of other department
managers.

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 II.13.2. Recommendation

As stated in this feasibility study the envisaged project has a role to play in solving the
exacerbating problem related with car parking in Addis.

To realize its dreams and goals the project need support from also stakeholders identifies in
the first section of this paper.

The project is financially viable, economically sound and socially desirable and worth
supporting from all stakeholders.

In cognizant to the aforementioned facts, provision of both financial and technical support to
this project contributes a lot to the national economy in general and the promoters’ business
success in particular.

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II.14. Annexes

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 TMS Smart Car Parking and Electric Vehicles Charging Project
Income Statement Projection
Project years
Description 1 2 3 4 5 6 7 8 9 10
Sales revenue 35,784,000 38,169,600 40,555,200 42,940,800 42,940,800 42,940,800 42,940,800 42,940,800 42,940,800 42,940,800
Operating Costs
Software roylty (10% of revenue) 3,578,400 3,816,960 4,055,520 4,294,080 4,294,080 4,294,080 4,294,080 4,294,080 4,294,080 4,294,080
Utilities (water, elecricity, teleph.) 800,000 800,000 800,000 800,000 800,000 800,000 800,000 800,000 800,000 800,000
Sanitary cleaning supplies (5%
of revenue) 1,789,200 1,908,480 2,027,760 2,147,040 2,147,040 2,147,040 2,147,040 2,147,040 2,147,040 2,147,040
Working space rental cost 1,680,000 1,680,000 1,680,000 1,680,000 1,680,000 1,680,000 1,680,000 1,680,000 1,680,000 1,680,000
Wages and salary 2,689,200 2,689,200 2,689,200 2,689,200 2,689,200 2,689,200 2,689,200 2,689,200 2,689,200 2,689,200
Factory Overhead Costs 896,760 896,760 896,760 896,760 896,760 896,760 896,760 896,760 896,760 896,760
Repair and maintenance 742,410 742,410 742,410 742,410 742,410 742,410 742,410 742,410 742,410 742,410
Spare Part 232,926 232,926 232,926 232,926 232,926 232,926 232,926 232,926 232,926
Insurance 278,404 278,404 278,404 278,404 278,404 278,404 278,404 278,404 278,404 278,404
Total operating costs 12,454,374 13,045,140 13,402,980 13,760,820 13,760,820 13,760,820 13,760,820 13,760,820 13,760,820 13,760,820
Profit Before Depr. & Amor. 23,329,626 25,124,460 27,152,220 29,179,980 29,179,980 29,179,980 29,179,980 29,179,980 29,179,980 29,179,980
Less: Depre. & Amort. 3,040,725 3,040,725 3,040,725 3,040,725 3,040,725 3,040,725 3,040,725 3,040,725 3,040,725 3,040,725
Profit Before Int. and tax 20,288,902 22,083,736 24,111,496 26,139,256 26,139,256 26,139,256 26,139,256 26,139,256 26,139,256 26,139,256
Less: Interest Expense 3,361,009 2,920,082 2,479,156 2,038,229 1,597,302 1,156,376 715,449 274,522
Profit Before tax 16,927,893 19,163,653 21,632,340 24,101,027 24,541,953 24,982,880 25,423,807 25,864,733 26,139,256 26,139,256
Less: Profit tax 7,230,308 7,362,586 7,494,864 7,627,142 7,759,420 7,841,777 7,841,777
Net Profit/Loss 16,927,893 19,163,653 21,632,340 16,870,719 17,179,367 17,488,016 17,796,665 18,105,313 18,297,479 18,297,479

Page 23 of 35
 TMS Smart Car Parking and Electric Vehicles Charging Project
Working Capital Determination
Project Year
Period
Description (month) 1 2 3 4 5 6 7 8 9 10
Input cost 1 298,200 318,080 337,960 357,840 357,840 357,840 357,840 357,840 357,840 357,840
Utilities 1 66,667 66,667 66,667 66,667 66,667 66,667 66,667 66,667 66,667 66,667
Wages and salary 1 224,100 224,100 224,100 224,100 224,100 224,100 224,100 224,100 224,100 224,100
Miscellaneous 1 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000
Advertising & Promotion 1 71,568 76,339 81,110 85,882 85,882 85,882 85,882 85,882 85,882 85,882
Total working capital 710,535 735,186 759,837 784,488 784,488 784,488 784,488 784,488 784,488 784,488
Existing working capital -
Incremental working capital 710,535 24,651 24,651 24,651 - - - - - -

Page 24 of 35
 TMS Smart Car Parking and Electric Vehicles Charging Project
Cash Flow Projection
Project Years
Description 0 1 2 3 4 5 6 7 8 9 10
Cash inflow
Owner's equity 12,493,329
Bank loan 29,395,113
Net income 16,927,893 19,163,653 21,632,340 16,870,719 17,179,367 17,488,016 17,796,665 18,105,313 18,297,479 18,297,479
Depreciation 3,040,725 3,040,725 3,040,725 3,040,725 3,040,725 3,040,725 3,040,725 3,040,725 3,040,725 3,040,725
Total cash inflow 41,888,443 19,968,617 22,204,378 24,673,064 19,911,443 20,220,092 20,528,740 20,837,389 21,146,038 21,338,203 21,338,203
Cash outflow
Fixed asset 37,120,494
Increase in working capital 710,535 24,651 24,651 24,651 - - - - - -
Loan repayment 3,674,389 3,674,389 3,674,389 3,674,389 3,674,389 3,674,389 3,674,389 3,674,389
Dividend 10,156,736 9,581,827 10,816,170 8,435,359 3,435,873 8,744,008 8,898,332 9,052,657 9,148,739 9,148,739
Replacement 377,617
Total cash outflow 37,831,029 13,831,125 13,280,867 14,515,210 12,134,400 7,487,880 12,418,397 12,572,722 12,727,046 9,148,739 9,148,739
Net cash flow 4,057,414 6,137,492 8,923,511 10,157,854 7,777,043 12,732,212 8,110,343 8,264,668 8,418,992 12,189,464 12,189,464
Cumulative cash flow 6,137,492 15,061,003 25,218,857 32,995,901 45,728,113 53,838,456 62,103,123 70,522,116 82,711,579 94,901,043

Page 25 of 35
 TMS Smart Car Parking and Electric Vehicles Charging Project
Balance Sheet Projection
Project Years
Description 0 1 2 3 4 5 6 7 8 9 10
Assets
Current Assets
Cash 6,137,492 15,061,003 25,218,857 32,995,901 45,728,113 53,838,456 62,103,123 70,522,116 82,711,579 94,901,043
Inventory 710,535 710,535 735,186 759,837 784,488 784,488 784,488 784,488 784,488 784,488 784,488
Total current asset 710,535 6,848,027 15,796,189 25,978,694 33,780,389 46,512,601 54,622,944 62,887,612 71,306,604 83,496,068 95,685,532
Fixed Assets
Building and Construction 22,296,561 21,181,733 20,066,905 18,952,077 17,837,249 16,722,420 15,607,592 14,492,764 13,377,936 12,263,108 11,148,280
Machinery & Equipment 11,646,317 10,481,685 9,317,053 8,152,422 6,987,790 5,823,158 4,658,527 3,493,895 2,329,263 1,164,632 -
Furniture and Equipment 377,617 302,094 226,570 151,047 75,523 377,617 302,094 226,570 151,047 75,523 -
Electric power installation 2,800,000 2,520,000 2,240,000 1,960,000 1,680,000 1,400,000 1,120,000 840,000 560,000 280,000 -
Total fixed assets 37,120,494 34,485,511 31,850,528 29,215,545 26,580,562 24,323,196 21,688,213 19,053,230 16,418,247 13,783,263 11,148,280
Intangible Assets
Pre-production interest 3,527,414 3,174,672 2,821,931 2,469,190 2,116,448 1,763,707 1,410,965 1,058,224 705,483 352,741 (0)
Pre-production Cost 530,000 477,000 424,000 371,000 318,000 265,000 212,000 159,000 106,000 53,000 -
Total Assets 41,888,443 44,985,211 50,892,648 58,034,429 62,795,399 72,864,504 77,934,122 83,158,066 88,536,333 97,685,073 106,833,812
Liabilities & capital
Bank Loan 29,395,113 25,720,724 22,046,335 18,371,946 14,697,557 11,023,168 7,348,778 3,674,389
Capital
Owners' equity 12,493,329 12,493,329 12,493,329 12,493,329 12,493,329 12,493,329 12,493,329 12,493,329 12,493,329 12,493,329 12,493,329
Retained earning 6,771,157 16,352,984 27,169,154 35,604,513 49,348,007 58,092,015 66,990,347 76,043,004 85,191,743 94,340,483
Sub total 12,493,329 19,264,486 28,846,313 39,662,483 48,097,842 61,841,336 70,585,344 79,483,676 88,536,333 97,685,073 106,833,812
Total liability & equity 41,888,443 44,985,211 50,892,648 58,034,429 62,795,399 72,864,504 77,934,122 83,158,066 88,536,333 97,685,073 106,833,812
- - - - - - - - - - -

Page 26 of 35
 TMS Smart Car Parking and Electric Vehicles Charging Project
Calculation of Financial Internal Rate of Return
Working
Fixed asset Initial Net benefit Net benefit
Year Revenue capital Total benefit Replacement Operating costs Total Income tax Total cost
recovery investment after tax before tax
recovery

0 - 41,888,443 41,888,443 41,888,443 (41,888,443) (41,888,443)

1 35,784,000 35,784,000 12,454,374 12,454,374 - 12,454,374 23,329,626 23,329,626

2 38,169,600 38,169,600 13,045,140 13,045,140 - 13,045,140 25,124,460 25,124,460

3 40,555,200 40,555,200 13,402,980 13,402,980 - 13,402,980 27,152,220 27,152,220

4 42,940,800 42,940,800 13,760,820 13,760,820 7,230,308 20,991,128 21,949,672 29,179,980

5 42,940,800 42,940,800 377,617 13,760,820 14,138,437 7,362,586 21,501,023 21,439,777 28,802,363

6 42,940,800 42,940,800 13,760,820 13,760,820 7,494,864 21,255,684 21,685,116 29,179,980

7 42,940,800 42,940,800 13,760,820 13,760,820 7,627,142 21,387,962 21,552,838 29,179,980

8 42,940,800 42,940,800 13,760,820 13,760,820 7,759,420 21,520,240 21,420,560 29,179,980

9 42,940,800 42,940,800 13,760,820 13,760,820 7,841,777 21,602,597 21,338,203 29,179,980

10 42,940,800 784,488 11,148,280 54,873,569 13,760,820 13,760,820 7,841,777 21,602,597 33,270,972 41,112,749

IRR before tax : 61%

IRR after tax : 57%

NPV at 10% 94,508,139

Page 27 of 35
 Sensitivity Analysis
If Revenue is decreases by 10%
Working
Fixed asset Initial Net benefit Net benefit
Year Revenue capital Total benefit Replacement Operating costs Total Income tax Total cost
recovery investment after tax before tax
recovery

0 - 41,888,443 41,888,443 - 41,888,443 (41,888,443) (41,888,443)

1 32,205,600 32,205,600 12,454,374 12,454,374 4,004,848 16,459,221 15,746,379 19,751,226

2 34,352,640 34,352,640 13,045,140 13,045,140 4,604,008 17,649,148 16,703,492 21,307,500

3 36,499,680 36,499,680 13,402,980 13,402,980 5,273,046 18,676,026 17,823,654 23,096,700

4 38,646,720 38,646,720 13,760,820 13,760,820 5,942,084 19,702,904 18,943,816 24,885,900

5 38,646,720 38,646,720 377,617 13,760,820 14,138,437 6,074,362 20,212,799 18,433,921 24,508,283

6 38,646,720 38,646,720 13,760,820 13,760,820 6,206,640 19,967,460 18,679,260 24,885,900

7 38,646,720 38,646,720 13,760,820 13,760,820 6,338,918 20,099,738 18,546,982 24,885,900

8 38,646,720 38,646,720 13,760,820 13,760,820 6,471,196 20,232,016 18,414,704 24,885,900

9 38,646,720 38,646,720 13,760,820 13,760,820 6,553,553 20,314,373 18,332,347 24,885,900

10 38,646,720 784,488 11,148,280 50,579,489 13,760,820 13,760,820 6,553,553 20,314,373 30,265,116 36,818,669

IRR before tax : 52%

IRR after tax : 40%

Page 28 of 35
 Sensitivity Analysis
If Operating Cost is Increases by 10%

Working
Fixed asset Initial Net benefit Net benefit
Year Revenue capital Total benefit Replacement Operating costs Total Income tax Total cost
recovery investment after tax before tax
recovery

0 - 41,888,443 41,888,443 - 41,888,443 (41,888,443) (41,888,443)

1 35,784,000 35,784,000 13,699,811 13,699,811 4,704,737 18,404,548 17,379,452 22,084,189

2 38,169,600 38,169,600 14,349,654 14,349,654 5,357,742 19,707,396 18,462,204 23,819,946

3 40,555,200 40,555,200 14,743,278 14,743,278 6,087,613 20,830,890 19,724,310 25,811,922

4 42,940,800 42,940,800 15,136,902 15,136,902 6,817,483 21,954,385 20,986,415 27,803,898

5 42,940,800 42,940,800 377,617 15,136,902 15,514,519 6,949,761 22,464,281 20,476,519 27,426,281

6 42,940,800 42,940,800 15,136,902 15,136,902 7,082,039 22,218,941 20,721,859 27,803,898

7 42,940,800 42,940,800 15,136,902 15,136,902 7,214,317 22,351,219 20,589,581 27,803,898

8 42,940,800 42,940,800 15,136,902 15,136,902 7,346,595 22,483,497 20,457,303 27,803,898

9 42,940,800 42,940,800 15,136,902 15,136,902 7,428,952 22,565,854 20,374,946 27,803,898

10 42,940,800 784,488 11,148,280 54,873,569 15,136,902 15,136,902 7,428,952 22,565,854 32,307,715 39,736,667

IRR before tax : 58%

IRR after tax : 45%

Page 29 of 35
 Sensitivity Analysis
If Investment Outlay Increases by 10%
Working
Fixed asset Initial Net benefit Net benefit
Year Revenue capital Total benefit Replacement Operating costs Total Income tax Total cost
recovery investment after tax before tax
recovery

0 - 46,077,287 46,077,287 - 46,077,287 (46,077,287) (46,077,287)

1 35,784,000 35,784,000 12,454,374 12,454,374 - 12,454,374 23,329,626 23,329,626

2 38,169,600 38,169,600 13,045,140 13,045,140 - 13,045,140 25,124,460 25,124,460

3 40,555,200 40,555,200 13,402,980 13,402,980 - 13,402,980 27,152,220 27,152,220

4 42,940,800 42,940,800 13,760,820 13,760,820 7,230,308 20,991,128 21,949,672 29,179,980

5 42,940,800 42,940,800 377,618 13,760,820 14,138,438 7,362,586 21,501,024 21,439,776 28,802,362

6 42,940,800 42,940,800 13,760,820 13,760,820 7,494,864 21,255,684 21,685,116 29,179,980

7 42,940,800 42,940,800 13,760,820 13,760,820 7,627,142 21,387,962 21,552,838 29,179,980

8 42,940,800 42,940,800 13,760,820 13,760,820 7,759,420 21,520,240 21,420,560 29,179,980

9 42,940,800 42,940,800 13,760,820 13,760,820 7,841,777 21,602,597 21,338,203 29,179,980

10 42,940,800 784,488 11,148,280 54,873,569 13,760,820 13,760,820 7,841,777 21,602,597 33,270,972 41,112,749

IRR before tax : 55%

IRR after tax : 51%

Page 30 of 35
 TMS Smart Car Parking and Electric Vehicles Charging Project
Fund Allocation Assumption
Description Owner's equity Bank Loan Total (Birr)

Building and Construction 6,688,968.20 15,607,592.46 22,296,560.65

Machinery & Equipment 1,746,947.48 9,899,369.05 11,646,316.53

Furniture and Equipment - 377,617.30 377,617.30

Electric power installation - 2,800,000.00 2,800,000.00

Sub Total 8,435,915.68 28,684,578.81 37,120,494.48

Working Capital - 710,534.67 710,534.67

Sub Total - 710,534.67 710,534.67

Pre production interest 3,527,413.62 3,527,413.62

Pre production Cost 530,000.00 - 530,000.00

Sub Total 4,057,413.62 - 4,057,413.62

Total 12,493,329.29 29,395,113.47 41,888,442.77

Debt/Equity Ratio 30% 70% 100%

Fixed investment 89%

Pre production interest 8%
Pre production Cost 1%
Working capital 2%
Total investment cost 100%

Page 31 of 35
 TMS Smart Car Parking and Electric Vehicles Charging Project
Loan Repayment Schedule
Principal Interest Outstanding
Date
Repayment Payment Balance
2022
31-Dec 29,395,113
2023
31-Mar 869,773 29,395,113
30-Jun 879,437 29,395,113
30-Sep 889,102 29,395,113
31-Dec 889,102 29,395,113
- 3,527,414
2024
31-Mar 918,597.30 869,773 28,476,516
30-Jun 918,597.30 851,955 27,557,919
30-Sep 918,597.30 833,533 26,639,322
31-Dec 918,597.30 805,748 25,720,724
3,674,389 3,361,009
2025
31-Mar 918,597.30 761,052 24,802,127
30-Jun 918,597.30 742,025 23,883,530
30-Sep 918,597.30 722,395 22,964,932
31-Dec 918,597.30 694,611 22,046,335
3,674,389 2,920,082
2026
31-Mar 918,597.30 652,330 21,127,738
30-Jun 918,597.30 632,096 20,209,141
30-Sep 918,597.30 611,257 19,290,543
31-Dec 918,597.30 583,473 18,371,946
3,674,389 2,479,156
2027
31-Mar 918,597.30 543,608 17,453,349
30-Jun 918,597.30 522,166 16,534,751
30-Sep 918,597.30 500,120 15,616,154
31-Dec 918,597.30 472,335 14,697,557
3,674,389 2,038,229
2028
31-Mar 918,597.30 434,887 13,778,959
30-Jun 918,597.30 412,236 12,860,362
30-Sep 918,597.30 388,982 11,941,765
31-Dec 918,597.30 361,197 11,023,168
3,674,389 1,597,302
2029
31-Mar 918,597.30 326,165 10,104,570
30-Jun 918,597.30 302,307 9,185,973
30-Sep 918,597.30 277,844 8,267,376
31-Dec 918,597.30 250,060 7,348,778
3,674,389 1,156,376
2030
31-Mar 918,597.30 217,443 6,430,181
30-Jun 918,597.30 192,377 5,511,584
30-Sep 918,597.30 166,707 4,592,986
31-Dec 918,597.30 138,922 3,674,389
3,674,389 715,449
2031
31-Mar 918,597.30 108,722 2,755,792
30-Jun 918,597.30 82,447 1,837,195
30-Sep 918,597.30 55,569 918,597
31-Dec 918,597.30 27,784 -
3,674,389 274,522
29,395,113 18,069,539

Page 32 of 35
 TMS Smart Car Parking and Electric Vehicles Charging Project
Assumptions Used in Financial Projections
1 Products
The plant will give two different kinds of services; Namely
Smart Car parking Services
Electric Vehicles Charging Services
The project will have a total of 140 parking space (20*7) 140
2 Production
2.1 Working Hours
Working hours per day 8
No. of shifts per day 2
Total annual working days 300
3 Production Capacity and Product Mix
Smart Car parking system 70% of customers
Electric Vehicles Charging Services 30% of customers
Total Service hour 672,000.00
Thus, it will produce:
Smart Car parking system 470,400 Service hr/year
Electric Vehicles Charging Services 201,600 Service hr/year
Total 672,000 Service hr/year
The services at full capacity s presented below:
Annual Production Capacity (Service
Items
hr/year)
Smart Car parking system 470,400
Electric Vehicles Charging Services 201,600
Total 672,000

The annual service at capacity rate is presented below:

Smart Car Electric Vehicles Total (Service
Years Rate
parking system Charging Services hr/year)
1 75% 352,800 151,200 504,000
2 80% 376,320 161,280 537,600
3 85% 399,840 171,360 571,200
4 and onwards 90% 423,360 181,440 604,800
4 Product selling prices

Product Selling Price (Birr/hr)

Smart Car parking Services 50.0

Electric Vehicles Charging Services 120
5 Revenue Projection
Annual revenue at 100% capacity utilization

Product Selling Price Service Hour Total Revenue (Birr)

Smart Car parking Services 50.0 470,400 23,520,000

Electric Vehicles Charging Services 120.0 201,600 24,192,000
Annual revenue at different capacity utilization
Smart Car Electric Vehicles Total Revenue
Years Rate
parking Services Charging Services (Birr)
1 75% 17,640,000 18,144,000 35,784,000
2 80% 18,816,000 19,353,600 38,169,600
3 85% 19,992,000 20,563,200 40,555,200
4 and onwards 90% 21,168,000 21,772,800 42,940,800

Page 33 of 35
6 Wage and Salary
Manpower Requirement and Salary Structure
Experience Monthly Salary Quantity
Position Educational Qualification
Required (Birr) Required Annual Salary
1. General Manager office
General Manager MA/BA in Management/Economics 6 or 10 30,000 1 360,000
Secretary Diploma in Secretarial Science 2 and above 3,100 1 37,200
2. Administration and Finance Dep’t -
2.1.Administration Division
Administration and Finance Manager BA in Management/Economics 8 15,000 1 180,000
Personal clerk Diploma in H.R .Mgt. 2 4,000 1 48,000
th
Security 8 grade complete and above 2 2,000 4 96,000
th
Janitor 8 grade complete and above - 1,500 2 36,000
th th
Driver 10/12 complete+ 4 grade license 2 and above 3,000 5 180,000
Store keeper Diploma in purchasing 2 4,000 1 48,000
2.2.Finance Division -
Finance Head BA in Accounting 6 15,000 1 180,000
Accountant BA Finance/ Accounting 4 6,000 1 72,000
Junior accountant BA Finance/ Accounting 2 5,000 1 60,000
Cashier Diploma in accounting 2 4,000 1 48,000
Services and Technical Department -
Services and Technical Head BSC in Mechanical Engineering 7 and above 15,000 1 180,000
Services Division -
Services watcher Degree in mechanical engineering 5 10,000 1 120,000
Shift leaders Degree in mechanical engineering 2 8,000 1 96,000
3.2.Technical Division -
Technician Degree in mechanical engineering 5 10,000 1 120,000
Machiner /tower maintenance TVET Certificate - 6,000 5 360,000
Electrician Diploma in electricity 3 4,000 1 48,000
4. Customer desk -
Informatio desk BA in communicatin/marketing 3 15,000 1 180,000
Compliant handling TVET certificate 2 4,000 1 48,000
2 for BA and 3
Purchasing officer BA/diploma in mgt/purchasing mgt/economics 6,000
for diploma 1 72,000
2 for BA and 3
Sales officer BA/diploma in mgt/purchasing mgt/economics 6,000
for diploma 1 72,000
Assistant Sales TVET (10+3) Salesman ship /Marketing 2 4,000 1 48,000
Total
35 2,689,200

Page 34 of 35
7 Factory Overhead Cost
Annual cost
Description Rate (%) (in Birr)
Fringe Benefits (This includes,
pension fund, medical expenses, 20% of salary & wages
insurance…) 537,840
10% of salary & wages
Staff Training 268,920

Office supplies (Stationery & P.T.T) - 40,000

Miscellaneous expense - 50,000
Total 896,760

8 Repair and maintenance

Repair &
Repair &
maintenance
Maintenance Cost
Description Total investment rate
Building and Construction 22,296,561 2% 445,931.21
Machinery & Equipment 11,646,317 2% 232,926.33
Furniture and Equipment 377,617 2% 7,552.35
Electric power installation 2,800,000 2% 56,000.00
Total 742,410

9 Spare Part
Spare part cost for machinery and equipment, earth moving
machinery and vehicles is 4% of original investment cost starting from year two
Description Total Investment Rate Spare part rate cost

Machinery & Equipment 11,646,317 2.00% 232,926

Total 232,926

10 Insurance
Insurance
Insurance Cost
Total investment premium rate
Building and Construction 22,296,561 0.75% 167,224
Machinery & Equipment 11,646,317 0.75% 87,347
Furniture and Equipment 377,617 0.75% 2,832
Electric power installation 2,800,000 0.75% 21,000
Total Cost 278,404

Page 35 of 35