Project Proposal for Bright Academy

Project to be implemented in CEPRS, Siltie Zone, Hulbarage Woreda, Shama

town

Promoter:-Mezid Keyru

Mobile:-0928936887

October, 2023

Shama
Contents

Executive Summary..........................................................................................................................................1
1. General Background..............................................................................................................................2
2. Situational Analysis................................................................................................................................7
3. Land use plan and Construction work...............................................................................................12
4. Organizational Structure.....................................................................................................................13
5. Financial Requirement and Analysis..................................................................................................13

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Executive Summary
Project name its objective: Bright Academy is a private school aimed to provide best quality
education service with fair price; it gives more attention on quality education service & to become
a bench mark for the others. The school will align its work with its mission, producing competent
students & ethically well shaped students.

Project Owner: Mezid Keyru

Project location: CEP Region, Siltie Zone, Hulbarage Woreda, Shama town

Total investment Cost: The school initial investment will 14,411,141.8 Birr. (Capital) for this
new school building construction and opening. It will have 27 qualified staffs (certificate, diploma
and degree) as per the current education office standard & works to satisfy its beneficiary.

Source of finance: The total investment capital of the project is to be financed from the
promoter’s equity. The financial analysis of the envisaged project was carried out for the
following 3 years. According to the projected income statement, the envisaged project starts
earning profit from the first year of execution. The income statement and other profitability
indicators show that the project is viable. The project's initial investment will be fully recovered
within 10 years.

The total area required: for the School construction and development project will be 5000m2.

This project envisages: The school will open in 2017 E.C. The school will collect birr
1,314,000.00 as revenue by the 1st year, according the market study plan the school will become
more profited starting its 1st year and will become fames with the coming 5 years.

The project is believed to have significant social and economic benefits that accrue to the society
beyond those financial returns to its owners. The project will hire 27 professionals, 12 supportive
staff and 120 on casual basis and adds value to the countries development and competitiveness.

Therefore, considering the attractive financial, economic and social benefits the project is to
produce, the company has made the necessary preparation to get in to the business hoping that all

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the concerned offices& institutions should give their support to facilitate the implementation of
this plan.

1. General Background

Education is a basic human right – universal, inalienable and indivisible. This is underscored in
human rights treaties and international agreements; most notably, the United Nations Convention
on the Rights of the Child. Education contributes too many of the SDGs. It reduces poverty, drives
sustainable economic growth, prevents inequality and injustice, leads to better health – particularly
for women and children – and it helps to protect the planet. Education empowers children and
adolescents. But the economic and social benefits of education depend on generating learning
outcomes, and not just getting children into school (UNICEF 2019).

Private schools are growing in their share of service provision, including in low income countries.
In 2017, they constituted 42 per cent of pre-primary enrolments, 17 per cent of primary and 27 per
cent of secondary enrolments globally. “The private sector is a major player in provisioning of
education in many states. From a government perspective the role is one of regulation and
accreditation.”

Investments in Academy are believed to be critical in forming the foundation for life-long learning
and providing children with the opportunity to reach their full potential. This is because
kindergarten is a crucial phase of growth and development, where early circumstances can
influence outcomes across the entire course of an individual’s life (WHO 2012). High-quality
Early Childhood Care and kindergarten Education are now recognized as a core strategy for
poverty reduction. There is evidence of high returns from Early Childhood Care and kindergarten
Education investments, which can contribute, to global policy priorities such as tackling child
malnutrition increasing children’s successful participation in school and strengthening economic
development.

Evidence of the long-term benefits from early intervention combines with estimates about the
current loss in developmental potential, and data on the wider economic returns of early
investment in children to build a persuasive case for targeted investment in quality programs.
Moreover, it is widely recognized fact that preschool education is an integral part of basic

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education and represents the first and essential step in achieving the goals of Education-for-All in
particular and human skill formation.

The main aim of pre-primary education is the all rounded development of children in order to
prepare them for formal schooling. In the same way, Preschool programs aim to provide early
developmental and educational activities to foster children’s social and cognitive maturation, and
to help prepare them for school.

To this effect, the owner of the envisioned ….kindergarten school building share company
planned to construct in Werabe town and undertaken this project study to check the market,
technical and financial feasibility of this project. The promoter is very ambitious and committed to
realize the project. Hence, the enterprise expects to get the necessary support from the town
administration to make the project to be operational.

Looking at the past trends and permits issues by the Government to the construction of school by
private investment building in the major urban areas of the country especially one can easily
conclude that the momentum is more likely to continue. Besides, the government policies and
incentives for the evicted people due to urban expansion the investment are very promising that
motivates the promoter to engaged in the kindergarten school building.

1.1. Objective of the project

The major goal of this project is used as income source of the evicted groups who establishes the
Academy and to contribute towards the growth of the education sector in the town. Its specific
objectives include the following.

 To build and develop modern kindergarten and primary school.

 To undertake high quality education and other refuted business activities that enable to
generate a reasonable to the invested capital.
 To develop modern education center that would provide standardized services in order to
attract the customers and thereby contribute towards the generation of income and to meet
current and future needs.

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1.2. Project description

The long-term goal of the project is become the best choice in Shama town and its surrounding
areas by creating a differentiated experience capitalizing on personal service. The proposed project
will have a total area of 5000m2, designed to reader a standardized giving high quality education,
which will in turn plays significant role towards solving shortage of kindergarten and primary
education center in the Shama town.

Based on environmental and other considerations, the entrepreneur has determined the type and
size of the building which is already determined by the site; conceptual planning and preliminary
analysis have been carried out by analysts. In order to attract its clients to the service, the project
will build high standard class rooms and office of best choices and will also save best quality
education.

1.3. Project Rationale

Internationally the economic growth this country is experiencing, the good governance created and
even if the town is in its nascent stage of development these project in the town are feasible and
would be a model development in promoting and attracting different urban investments.

In order to respond to the created environment the town is in need of major, basic and feasible
urban projects to be developed. The existing promising investment opportunities, the demands of
service needs along with relatively sound investment support made by the government in such
kinds of feasible projects, compelled the project promoter to initiate the academic oriented
business project to be established. Despite the promising business opportunities of the town, the
trend on such kinds of investment found to minimal. Such kind of business center in the town is to
accommodate the existing demand of these services in the town and the surrounding areas. The
mismatch between the demand for and supply of such kind of services in easily observed in the
town. Therefore, the existing shortage in the supply of these services, along with its education
access, better location and infrastructure access and escalating trend of urbanization, thus it is with
such reason that this project is identified and proposed and assumed to be more profitable.

1.4. The significance of the project

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The envisaged project deemed to add to the shortage of pre-primary school of the zone in general
and town in specific with following ways:

A. Improve education access

Academic investment has positive externalities beyond improving cognitive and socio- emotional
development of children, in that it brings reductions in crime, and lower expenditures on health
care and remedial education, which implies lower correctional and other costs for parents and
society at large. Therefore, the school building will improves education access for the town as well
as for the zone.

B. Employment opportunity

One of the problems that our country faced is unemployment. Therefore, the current objective of
the government is working on tackling the problem of unemployment and fostering the
development process either through creating self-employment or employment in other
organization. Hence, this project in the first phase will hire 18 professional individuals and more
than 60 individual during construction.

C. Sources of social service

In addition to serving as a source of employment and improving education access for the town, the
project renders social services for different group of people. Hence, it is also providing the
following services;

 Serve as a high quality education center for the society and as mental satisfaction for the
different users,
 Since, the center built in new built up areas; it will create better opportunities for the
surrounding community.
 It deemed to minimize the shortage of Academic center and other bundles of services in
the area.
1.5. Project Location

The project is planned to be established in C/E/P/R/S, SIltie Zone, Hulbarag Woreda at Shama
town. Siltie Zone is in the C/E/P/R/S and named for the Siltie people, whose homeland lies in the
zone. Siltie is bordered on the south by Alaba Zone, on the southwest by Hadiya zone on the north
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by Gurage Zone, and on the east by the Oromia Region. It has a total area of 2537.5 sq.km and lies
between 7.43-8.10 latitude and 37.86 to 38.53 longitudes, with an elevation managing 1501-3500
meter above sea level.

The zone has 10 woredas & 3 Town Administrator. Based on the 2008 census conducted by the
Central Statistics Agency of Ethiopia (CSA) this Zone has a total population of 840,598 of whom
407,690(48.5%) are mal 432,908(51.5%) women, 47,097(6.28%) are urban inhabitants. The
largest ethnic group reported in Siltie was the Siltie people (97.35%), all other ethnic group made
up 2.65% of the population. Siltie is spoken as a fires language by 96.95% of the population and
1.48% spoken Amharic, the remaining 1.57% spoken all other primary languages reported. It is
worth mentioning that 12 km lst grade asphalt road which is between Addis Ababa and hosaena is
the basic fact for the economic development so for reached among others 39.13 km dry season
road 17.23 km winter season road 4.06 km coble stone road 80% coverage of clean water supply
26.5 km main waterline installation 13.5 km door water line installation and last but not least 24
hours day in day out electric supply are the major economic development.

Even though the infrastructure development is fast it is not accordance with the growth of the
population and land holding that in turn calls for the due concern of the Zone Administration and
regional government for the invitation and intervention of private investors.

Hulbarag Woreda is location is 140 km North West of the town Hawassa and 164 km south west
of Addis Ababa at the extreme edge of east African rift valley and south east dalocha woreda on
the east and allicho woreda on the west. According to the sample study conducted 0 2008 E.C the
total population is 70,060 settled in 2,631 Hector of land regarding is environment, it is between
2,080 and 2,100 meter above sea level 2,100 mm annual rain fall with 22.2 and 15.3 degree
Celsius higher and lower respectively that Makes attractive for the potential investors. Effective
1993 E.C Where in the town is assigned as the capital of the zone by the coordinated effort of the
government native native nationals and development ally’s fruitful development is registered in
the areas of education Health and various infrastructure.

The main justifications behind the selection of this location are fluffiness of infrastructure. Also
there is availability of enough labor force, Conductive investment policy and governance.

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The proposal presented for this project requires the consideration not only of technical commercial
and finance factors only but also of social & environmental following factors must be considered
infrastructure service existing industrial infrastructure economic and social infrastructure&
intuitional frame work urbanization Ecological and environmental impact of the project.

2. Situational Analysis
2.1. Market Summary

Ethiopia is a country that is on a journey to its renaissance targeting at achieving peace, unity-
with-diversity, broad and rapid socio-economic growth, establishment of democratic systems and
good governance. The Government has been engaged in a major effort to transform Ethiopian
society and place the country on a trajectory to become a lower middle- income economy by the
year, 2030. Over the last several years, the economy grew by nearly 10 per cent per annum, one of
the fastest growth rates registered in the world. During this time, significant attention has been
given to upgrading economic and social infrastructure and promoting pro-poor spending on
education, health, and other services to benefit the poor and the marginalized.

Understanding this crucial role, the education sector has passed through a series of successive,
rolling Education Sector Development Programs (ESDP I-V). Since the formulation of the 1st
Growth and Transformation Plan (GTP I), education was given a special attention in the
transformation of the economy from agriculture-led to industry-led activity and thereby supporting
the manufacturing sector by supplying the required professionals and problem solving
technological innovations.

To achieve its vision of becoming a lower middle income by 2030, Ethiopia has also developed
the 2nd Growth and Transformation Plan (GTP II) built on sector policies, strategies and programs
and the UN sustainable development goals. GTP II aims to achieve an annual average real GDP
growth rate of 11 per cent, pursing aggressive measures towards rapid industrialization and
structural transformation such as increasing the productive capacity and efficiency of the economy
by rapidly improving quality, productivity, and competitiveness of agriculture and manufacturing
industries, and accelerate Human capital development and technological capacity building and
ensure sustainability. Education is instrumental to attaining these development goals through
application of science, technology and innovations. The latter are major instruments to create
wealth and bring about national development.
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Recently in Ethiopia, there has been massive expansion throughout the education system. Pre-
primary school education designed for age 4-6 and Primary school education consists of two
cycles from grade 1 -6 and grade 7-8. Primary schools have over 90% of 7 year old enrolled.

However, low pay and undervaluation of teachers contributes to poor quality teaching. There were
no incentives for good work or penalties for poor practice. This is exacerbated by large class sizes
and poor resources, such as poor library facilities, lack of text books and equipment, resulting on
poor performance on national assessments. Consequently, teaching was usually “talk and chalk”
with rote learning. Due to this many teachers lack motivation and 60% would move to another job
if given the opportunity. Moreover, especially in rural areas, not all parents can afford to send their
children to school. Parents may need to pay for clothes, books, transport and school fee. In
addition, there are cultural attitudes against educating girls. Regarding sanitary facilities schools
may lack a water supply and separate toilets for girls and boys.

Since current resources are insufficient for providing even basic primary education to Ethiopian
children, the Ministry of Education (MOE, 2002) currently deem-phasizes pre-primary education.
Nevertheless, recognizing the importance of quality education at this level, the Ministry is
currently strongly encouraging the involvement of private institutions and individuals to invest in
education at this level. Thus, through nongovernmental organizations, missions, private
individuals, religious institutions, and other organizations, a number of pre-primary schools are
beginning to reemerge in urban areas. As the result of programs is a lack of qualified teachers in
these programs.

Student enrollment

A global report on early childhood education that shows that Ethiopia’s commitment to promoting
pre-primary education has led to an increase in gross enrollment from less than two percent in
2000 to more than 45 percent in 2017.

With respect to access and retention, since 2000, some 75 million more children have been
enrolled in pre-primary education, 89 million more in primary education and 138 million more in
secondary education. Nevertheless, at least 175 million pre-primary school-age children and
262 million primary and secondary school-age children – one in five – are still not accessing
education. To reach universal pre-primary, primary and secondary education in 2030, on average,

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countries will need to enroll 5.7 times the number of children currently in pre-primary, 1.1 times
the number in primary and 2 times the number of children in secondary education. The access
challenge is greatest in sub-Saharan Africa where projected population growth is highest. To reach
universal pre-primary, primary and secondary education in 2030, sub-Saharan Africa will need to
enroll 3.3 times the number of children in total that it does today (UNICEF 2019). In low-income
countries, on average only 1 in 5 young children are enrolled in pre-primary education.

Number of schools in the area

In 2016 E.C. there is no private academy and one government owned schools in Shama town.
With regard to primary and secondary school there are one primary schools /1-8/ and one.

2.1.1. Market Needs

As indicated above the total number of students of age 4-14 in the area is above the schools
acceptance capacity. Moreover, the number of population increases from year to year. Some
researches indicate that, today, more than ever, there is a constant public outcry for access to
quality educational services. They look for school choice. The starting point for school choice is
the availability of private schooling. School choice is believed to increase the efficiency of
educational services by encouraging competition and sharpening innovations in the sector.
Moreover, as per World Bank report, in Ethiopia positive results have been achieved in universal
pre-primary education although the Millennium Development Goal target may not met. The
progress in critical aspects of human development the country needs considerable investment.

Trends – (Local economic trend)

The market for school is expanding in the country in general due to free market policy and unmeet
standard of school enrollments. The labor rate and rent cost of buildings and machine, vehicles etc
is increasing. This indicated increasing economic trend. When we see our country census data as
below, we can understand that, how the students (age 7-12) enrolment rate will increase from year
to year by 2020-2026). This shows that the market demand will grow by the coming 5 years.
Projected School Age population Size (thousands) of SNNP Region, Medium Variant: 2008-2037
(Census data) Table A7.7.7)

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Year 7-12 age 13-14 age 15-18 age
Tota Male Female Total Male Female Tota Male Female
l l
2020 3035 1530 1506 1014 509 505 1974 990 984
2021 3087 1557 1531 987 496 491 2000 1003 997
2022 3136 1582 1554 968 487 481 2005 1005 1000
2023 3182 1606 1577 987 497 490 1981 994 987
2024 3227 1629 1598 1005 506 499 1966 987 979
2025 3270 1651 1619 1022 515 507 1958 984 974
2026 3312 1672 1639 1037 523 514 1958 985 973

Shama town is located at south west of SNNP Region. In Shama town there is high population rate
of school age children and some of children haven’t got education opportunity with a short distant
area because of there is only one governmental school in Shama town. This people lose their
ample time to send their children in to the nearby schools. This condition brings additional stress
on the family. These families will need and eager to get better education service in a much closed
distant area.

Competitors

Competition is the rivalry between companies selling similar products and services with the goal
of achieving revenue, profit, and market-share growth. Companies strive to increase sales volume
by utilizing the 4 components of the marketing mix, also referred to as the 4P's: product, place,
promotion, and place.

In our situation still the current education demands additional schools. Government encourages the
private sector to share this opportunity, So that our business will get enough market shares from
the current market. Strategy group is weak, so that barrier to entry is free.

Marketing Strategies

Mission: Mission of Bright Academy is to provide best quality education service to the Shama
town community with fair price and to become one of the schools known by quality education
service & bench mark for the others.

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Vision: producing competent students & ethically well shaped students.

Marketing objective: Marketing objective of Bright Academy is to satisfy the need of the
customer of education from KG to grade 1-4 in the year 2025 and KG to grade 1-8 in the year
2029.

Financial objective: The Financial objective of is to provide education service with affordable
price to the community and reach break-even point after a year and generate profit.

Target market: The target market of Bright Academy will be children which are qualified KG to
grade 1-8 and any community member who seeks primary education in the area where it is to be
established.

It holds an average of 40 students in a class to prevent those who go too far place area schools
which in turn minimizes the transportation cost and other risks. Therefore our main target is to
attract students which travel much kilo meters to get better education in their area with fair price
and minimum travel.

Since the area is new settlement area, parents come from different place looking for fair house rent
and settle in the area. So those newly coming students with their parents need to have better school
in their area with a fair price and Bright Academy takes this advantage in a sense being
competitive.

Parent Involvement: We believe that a large portion of student's success involves a joint effort
between student - parent - teacher triad.

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3. Land use plan and Construction work

3.1. land Use Plan and land utilization

The total land required for the envisioned project is estimated to be 5000m 2. The total area for the
construction of the building will be 1,171 m2, as revealed below.

S.N Description Land m2 Remark

1 Building 1,171
1.1. Class-rooms 896 4 block(16 class-room)
1.2. Director office 35
1.3. Teachers office 42
1.4 Library 63 1 block
1.5. Laboratory 63 1 block
1.6. Store 72
2. Playing and sport fields 2672
3. Green and open space 351
4. Reserved (future expansion) 806
Total 5000

3.2. Construction schedule

The construction project is proposed to be started on January, 2024, and is expected to be finished
on June 2024. This date of completion is practical based on the time of year in which the building
will be completed. The team allowed a two week contingency for any setbacks. Typically, winter
construction tends to cause unforeseen delays that negatively impact a construction project. These
conditions can and will almost undoubtedly impact the project schedule by causing unforeseen
delays and project inefficiency.

3.3. Project implementation

The construction’s implementation is expected to take 12 months. The major activities include
cleaning the area around the building; Procurement of equipment’s and starts rendering services.
The time schedule for the above matured major activities is presented below:

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Table: project Implementation schedule

S.N. Activities Date

1 Land request processing October, 2023
2 Land approval December, 2023
3 Site Development January, 2024
4 Building construction work January, 2024- June, 2024
5 Preparation for service July, 2025
6 Service execution August , 2025

4. Organizational Structure

The organizational structure of the project is designed by including all the necessary personnel
under the right division. At the top of the organizational structure, there will be manager with the
responsibility of supervising the overall activity. Depending up on the nature of the center and the
amount of work to be performs; there exist auxiliary units under the general manager.

Employees under each unit will be supervised by the department head that is accountable for the
general manager. General Manager is appointed by the director’s board.

5. Financial Requirement and Analysis

The financial resource is a prime resource for undertaking any activities. Hence for implementing
this project a total of 15,000,000 ETB is required. This birr will be covered by the promoter of the
project. Therefore the said amount of finance is needed for undertaking the following.

5.1. fixed Investment

A. Land, Building & Construction

S.N Description of works Total Cost in birr

1 Building construction 8,123,077
2 Site Development 46,154
3 Design and supervision 115,384
4 1st year land lease and 10% down payment 125,114
Total 8,409,729

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 B. Vehicle

S.N Description UOM Qty Unit cost in birr Total cost in Birr Remark
1. Mini-Bus unit 1 400,000 807,692 Duty free
2. Student service unit 1 700,000 1,153,846 “
Total 1,961,538
C. office equipment and furniture

SN Description Measurement Qty Unit cost in birr Total cost in Birr

1 Managerial tables Unit 2.00 8,077 16,154

2 Managerial chairs Unit 2.00 6,462 12,924

3 Office table with chair Unit 8.00 4,615 36,928

4 Secretarial table with Unit 1.00 4,962 4,962

chairs

5 Computer with chairs Unit 2.00 27,692 55,384

6 Shelf Unit 2 12,692 25,384

7 Filing cabinets Unit 1.00 3,462 3,462

8 Guest chairs Unit 5.00 1,846 9,230

9 Fax & Telephone Unit 2.00 3,000 6,000

machine

10 Photo Copy machine Unit 1 64,615 64,615

11 Student Desk Unit 240 1,846 443,077

12 Black board Unit 16 1,385 22,160

13 TV & Dish with Unit 1 20,769 20,769

accessories

Total 721,049

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5.2. Working Capital
5.2.1. Operating Expense at full Capacity
a. salary Expense
s/n Position and qualification Qty Individual salary Monthly Annual salary
salary
1 Teachers Degree 8 4,200 33,600 403,200
Diploma 12 3,000 36,000 432,000
Certificate 7 2,200 15,400 184,000
2 Admin Manager 1 6,700 6,700 80,400
Director 1 5,600 5,600 67,200
Ass. Director 1 4,700 4,700 56,400
Secretary 1 2,800 2,800 33,600
Guard 2 1,600 3,200 38,400
Cleaner 2 1,400 2,800 33,600
Casher 1 2,200 2,200 26,400
Nanny/guardian 2 1,800 3,600 43,200
Librarian 1 3,000 3,000 36,000
Total 39 119,600 1,435,200

5.2.2. Operating Expenses

s/n Description Unit Qty Unit Total Remark
price price
1 Library books & fixtures Month 1 103,846 103,846
2 Laboratory equipment Month 1 288,461 288,461
3 Stationery Month 10 46,150 4,615
4 Teaching aid expense Month 1 16,000 16,000
5 Cost of teachers text Unit 120 80 9,600
6 Water, light, telephone fee Month 12 3000 36,000
7 Training expense Month 1 24,000 24,000
8 Admin staff - Cloth Qyt 6 1000 6,000
9 Miscellaneous Year 1 60,000 60,000
Total 548,522

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5.2.3. Pre-service Expenses
SN Description Cost in birr

1 Project proposal 10,000.00

2 Licensing fee and others 15,000

Total 25,000.00

Summary of Total initial investment cost

SN Description Cost in Birr

1 Land, Building & Construction 8,409,729

2 Vehicle 1,961,538

3 Office Equipment and Furniture 721,049

4 Total fixed investment cost 11,092,316

5 Salary expense 1,435,200.00

6 Operation expense 548,522

7 Pre service Expense 25,000.00

8 Total working capital 2,008,722

9 Sub total 13,101,038

10 Contingency (10%) 1,310,103.8

Total initial investment capital 14,411,141.8

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 5.3. Financial analysis and Statements
5.3.1. Underlying Assumption
The financial analysis of the Bright Academy is based on the data provided in the preceding
sections and the following assumptions.

A. construction and finance

Construction period 1 Years

Source of finance owners’ equity & revenue

B. depreciation
Building 10%

Vehicle 5%

Office Equipment’s &furniture 10%

5.3.2. Sources of Fund

The source of fund to finance the project is planned to be from owners’ equity sources. These are
promoter’s equity is expected to be saved from at starting of plan stage in bank institutions.
Taking the financial position of the promoters into account, owners’ equity contribution to finance
the total investment outlays of the construction work of the project is covered during construction
period.

5.3.3. Depreciation Schedule

SN Description Original Value Depreciation Depreciation per
in Birr rate in % year in Birr

1 Land, Building & Construction 8,409,729 10% 840,972.90

2 Vehicle 1,961,538 5% 98,076.9

3 Office Equipment & Furniture 721,049 10% 72,104.90

Total 1,011,154.7

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 5.4. Financial Statement
5.4.1. Income loss/statement
Project revenue and production costs are listed and compared to see whether the project generate
profits or not. Starting from first year of the project operation, the project will generate a
reasonable amount of net profit for the owners throughout its life period. Profit and loss statement
shows that the project will generate net profit of ETB 1,110,885.995 in the first year and increase
to ETB 1,525,318.625 starting from the third year of the project life and hence it is found to be
profitable.

School profit/Loss Statement

Revenue Year 1 Year 2 Year 3 & after

Registration & monthly fee 4,314,000.00 4,745,400 5,219,940

Expenses

Salary Expense 1,435,200.00 1,578,720 1,736,592

Operating Expenses 548,522 603,374.2 663,711.62

Deprecation of Building 840,972.90 840,972.90 840,972.90

Deprecation of office Equip 98,076.9 98,076.9 98,076.9

Deprecation of vehicle 72,104.90 72,104.90 72,104.90

Lease payment 12,198.60 12,198.60 12,198.60

Total Expense 3,007,075.3 3,205,447.5 3,425,447.5

Profit before Tax 1,306,924.7 1,539,952.5 1,794,492.5

Tax (15%) 196,038.705 230,992.875 269,173.875

Net profit 1,110,885.995 1,308,959.625 1,525,318.625

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5.5. Financial analysis
i. Profitability
According to the projected income statement, the school will start generating profit in the 1 st year
of operation. Important ration such as profit to total sales, net profit to equity (Return on equity)
and net profit (return on total investment) show as increasing trend during the lifetime of the
project. The income statement and the other indicators of profitability show that the project is
viable.

ii. Pay-Back periods

The investment cost and income statement projection are used to project the pay-back period. The
school’s total investment will be fully recovered at the 5.2 year of operation.

6. Environmental impact of the project

The EIA of the project activities was determined by identifying the environmental aspects and
then undertaking an environmental risk assessment to determine the significant environmental
aspects. The environmental impact assessment has included all phases of the project namely
construction phase and operational phase.

The building has both positive and negative impact

The positive impact of the project is:-

Generation of employment opportunity

Source income for the government through business income tax
Income generation for the promoter
Being exemplary for other investors who want to engage in the same business line.

Negative impact of the project

Noise and Dust emission during Construction

There are some noises during the construction due to the construction operation and the company
will use construct the construction during the day time. Again there is the emission of dust which
will be mitigated by sprinkling water on the service.

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Problem on workers on construction

During construction there are some problems that will materialize on workers. These are: damage
on operation by using machines, construction materials and others. To mitigate such impact the
company will provide safety insurance and safety equipment’s.

Swages during operation

During operation there are some wastes emitting from the school. These are wastes from the
different sources; such as dry waste and latrine will be mitigated by using modern waste treatment
technology.

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