Course No.

PGPM 21 Projects Formulation & Appraisal

Name: Senthil Kumar.M !e".No.2#$%1$&1$''#%$21%2(PGPPM)
Project Formulation & Appraisal
A. Assignment
An* compan* that has to sur+i+e in a competiti+e en+ironment cannot remain complacent
,ith the present. -t has to continuousl* .rin" a.out chan"e in or/er to a/apt to the altere/
en+ironment.
-n+estment opportunities in -n/ia are to/a* perhaps at a pea0. Supporte/ .* -n/ia1s
natural stren"ths the countr* o22ers in+estment opportunities in e3cess o2 45%% .illion in
/i+erse sectors o+er the ne3t 2i+e *ears.
Projects that are en/ea+ors to create uni6ue pro/ucts an/ ser+ices are .asicall* the
instruments lea/in" to or"ani7ational "ro,th. Projects ha+e a lon" term impact on the
character o2 the or"ani7ation. Projects create ,ealth not onl* 2or the or"ani7ation .ut also
2or the nation. Projects there2ore 2orm a +er* important part o2 the or"ani7ation1s
strate"* 2or sur+i+al & "ro,th an/ there2ore are the main concern o2 the corporate
mana"ement.
!eali7in" the tremen/ous opportunities the most o2 the pra"matic or"ani7ations are
plannin" to in+est in ne, projects. 8+er* project starts ,ith the perception o2 an
opportunit*. 9he .etter this is characteri7e/ the easier it ,ill .e to ju/"e the le+els o2
e3pen/iture an/ ris0 that are justi2ie/. -/enti2*in" the pattern .* ,hich technolo"*
creates ne, pro/ucts & ser+ices an/ e3ploitin" them earl* "i+es the compan* a
si"ni2icant competiti+e a/+anta"e.
-n the li"ht o2 *our stu/ies prepare an assi"nment on project 2ormulation e+aluation an/
appraisal o2 a h*pothetical project .* co+erin" the 2ollo,in":
-. Mar0et Anal*sis
--. 9echnical Anal*sis
---. Financial Anal*sis
B. Introduction
9he project e+aluation process in+ol+es more than just /eterminin" a project:s e3pecte/
re+enues an/ pro2ita.ilit*; it also in+ol+es a stu/* o2 the 0e* 2actors that a22ect a project
an/ their 2inancial impact on the project. -n a//ition a project e+aluation inclu/es
strate"ic e+aluation economic e+aluation an/ social impact e+aluation (!e2er 83hi.it -).
Pa"e 1 o2 15
Course No. PGPM 21 Projects Formulation & Appraisal
Name: Senthil Kumar.M !e".No.2#$%1$&1$''#%$21%2(PGPPM)
ASPECTS OF PROJECT APPRAISAL Source: Desai Vasant, Project
Manageent,! Pg" #o" $%&
<hile the 2inancial e+aluation o2 a project aims at ascertainin" the most e22icient strate"*
2or /eli+erin" the /esire/ output the strate"ic e+aluation ensures that the project is
consistent ,ith the output o.jecti+es o2 the 2irm.
PROJECT EVAL'ATIO# TEC(#I)'ES Source: Pae*a Peterson Financia*
Manageent an+ Ana*,sis,! Pg" #o" -&&
8conomic e+aluation o2 the project ho,e+er see0s to ensure that the /eli+ere/ output is
.ene2itin" the pu.lic at lar"e. 9he e+aluation o2 social impact aims at ensurin" that the
conse6uences o2 a project (in terms o2 emplo*ment output sa+in"s an/ so on) are
.ene2icial to the pu.lic.
A HYPOTHETICAL CAE T!"Y
Pa"e 2 o2 15
Project
Commerce 9echnical Financial 8conomic Mana"erial
=e"al Social 8colo"ical >r"anisation
Course No. PGPM 21 Projects Formulation & Appraisal
Name: Senthil Kumar.M !e".No.2#$%1$&1$''#%$21%2(PGPPM)
Go+in/am -n2rastructure Compan* is 2ocusin" on in+estments in emer"in" retail sector
throu"hout -n/ia. -t has propose/ to /e+elop a commercial space in Panaji$Goa. 9his
"i+es an opportunit* to enter a mar0et not teste/ so 2ar .* the .i" pla*ers in retail sector
an/ reap .ene2its o2 the 2irst 2ooter.
Goa State has esta.lishe/ itsel2 amon" the 2astest "ro,in" in/ustrial & commercial
centers in -n/ia. -t has ma/e impressi+e pro"ress in all roun/ /e+elopment measure/ .*
socio$economic in/icators an/ ran0s amon" the lea/in" union territor* states o2 -n/ia.
9his is one o2 the most ur.ani7e/ states in -n/ia. 9ourism an/ minin" are the main
sectors o2 the state econom*. Si7ea.le percenta"e o2 population ,or0s in the Mi//le 8ast
an/ ,estern countries an/ .rin"s home not onl* +alua.le 2orei"n e3chan"e 0itt* .ut also
a ne, consumer test o2 those places. 9he tourists 2rom -n/ia an/ all o+er the ,orl/ are
spen/in" much on leisure ,hile on holi/a*s in Goa. 9his .rin"s us a "oo/ opportunit* to
in+est in retail sector.
#A$%ET A&ALYI
ituational anal'sis
Compan* proposes to /e+elop a Shoppin" Mall in Panaji$Goa. 9he mar0et is mainl*
consistin" small$scale retail outlets +irtuall* monopoli7e/ .* the sellers. 9he mar0et also
lac0s presence o2 stron" cooperati+e sector. ?ue to scattere/ an/ satellite patterns o2
/e+elopment the cit* lac0s cohesi+e an/ homo"enous +olume o2 population compare/ to
other -n/ian cities. @o,e+er e3cellent in2rastructure importance o2 capital place lar"e
.ase o2 2loatin" population hi"h purchasin" po,er o2 consumers an/ hi"her le+el o2
consumer spen/in" "i+es a soli/ .ase 2or in+estment /ecision.
@ence ,e /eci/e/ to /e+elop a commercial space it consistin" mainl* o2 2ollo,in"
2acilities.
A @*per mar0et /ealin" in "rocer* an/ househol/ items
A Bran/e/ clothes te3tile pro/ucts cosmetics.
A Processe/ a"riculture horticulture 2loriculture pro/ucts.
A Be+era"es an/ restaurant.
A Consumer /ura.le "oo/s etc.
A @an/icra2ts an/ anti6ues
Pa"e & o2 15
Course No. PGPM 21 Projects Formulation & Appraisal
Name: Senthil Kumar.M !e".No.2#$%1$&1$''#%$21%2(PGPPM)
econdar' In(ormation
8conomic Pro2ile o2 Goa: 9he 8le+enth Finance commission !eport 2%%% ran0e/ Goa as
the premier state in terms o2 social an/ economic in2rastructure. Goa is an attracti+e
/estination 2or 2orei"n ?irect -n+estment (F?-). 9he contri.ution o2 F?- to the state1s
econom* has increase/ ten2ol/ in the past *ears.
P>PC=A9->N (2%%1 census) 1&DE''F
MA=8S 'FE2DF
F8MA=8S ''%D2%
C!BAN P>PC=A9->N G D#.DE
=-98!ACH !A98 ( census 2%%1 ) in G F2
MA=8 =-98!ACH in G FF.D
MA=8 =-98!ACH in num.ers 5D1%&2
F8MA=8 =-98!ACH in G E5.D
F8MA=8 =-98!ACH in num.ers DDD5&%
Census o2 -n/ia has projecte/ population .* Se3 i.e. 1' 2F%%% 2or Goa as on 1st March
2%%F
Sr. No. ?istrict 9otalI!uralICr.an
No. o2
@ousehol/s Persons Male Females
1 North Goa 9otal 1'D12# E5F5E& &FF5%2 &E%%E1
2 North Goa !ural FF2'5 D1'F2D 2115D& 2%52F1
& North Goa Cr.an E5F'D &D1ED# 1E'#5# 1'DE#%
D South Goa 9otal 1&%'F& 5F#%#5 2#FED' 2#%&D#
5 South Goa !ural 5'#'D 2'%2'E 12#%%2 1&12'5
' South Goa Cr.an E&E1# &2FF2F 1'#EDD 15#%FD
Source o2 in2ormation: Census o2 -n/ia
All -n/ia pattern o2 consumption in 2%%'$%E: (!e2. anne3ure no.l--)
>ut o2 e+er* rupee spent in 2%%'$%E .* the a+era"e ur.an -n/ian on consumption &#
paise ,ere spent on 2oo/. >2 this # paisa ,as spent on cereals an/ cereal su.stitutes E
paise on mil0 an/ mil0 pro/ucts ' paise on .e+era"es re2reshments an/ processe/ 2oo/
an/ D paise on +e"eta.les. 9here ,as little /i22erence .et,een rural an/ ur.an househol/s
in the share o2 the .u/"et allocate/ to 2uel an/ li"ht (1%G 2or rural #G 2or ur.an) an/
Pa"e D o2 15
Course No. PGPM 21 Projects Formulation & Appraisal
Name: Senthil Kumar.M !e".No.2#$%1$&1$''#%$21%2(PGPPM)
clothin" inclu/in" .e//in" an/ 2oot,ear (EG 2or rural 'G 2or ur.an).
9he a+era"e ur.an -n/ian /i22ere/ noticea.l* 2rom the rural mainl* .* spen/in" onl* #
paise out o2 one rupee on cereals .ut as much as 1D paise on consumer ser+ices E paise
on e/ucation an/ 5 paise on rent. -n 2act the ur.an -n/ian /e+ote/ onl* &# paise o2 the
rupee on 2oo/ spen/in" a smaller portion o2 the rupee than the rural -n/ian on e+er* 2oo/
"roup e3cept the cate"or* J.e+era"es re2reshments an/ processe/ 2oo/J.
Percenta"e o2 population .elo, speci2ic MPC8: (!e2. anne3ure no.lll & K-)
-n 2%%'$%E rou"hl* one$hal2 (5%.&G) o2 the rural population o2 -n/ia ha/ MPC8 less
than !S.5F% (column 2 o2 9a.le P1) compare/ to onl* 1E.DG o2 the ur.an population
column '). For ur.an -n/ia the me/ian le+el o2 MPC8 ,as !s.##%.
A+era"e MPC8 on "roups o2 items o2 consumption: (!e2. anne3ure no.-K)
For ur.an area applica.le to Group o2 union territories shall .e applica.le to Goa.
A+era"e MPC8 2or ur.an area applica.le to Goa ma* .e consi/ere/ as 1#DD.FF 2or 2oo/
an/ non$2oo/ "roup o2 e3pen/iture.
"E#A&" FO$ECATI&)
?eman/ 2orecast ,as /one usin" casual metho/ o2 2orecastin". As the project in+ol+es
pro/ucts o2 /irect consumption Consumption =e+el Metho/ suits .est to 2orecast
/eman/ o2 the pro/ucts
8stimate .ase/ on income an/ price elasticit* o2 /eman/: (!e2. anne3ure no. - & -K)
A""re"ate /eman/ can .e ,or0e/ out 2rom secon/ar* in2ormation a+aila.le ,ith us (re2.
Anne3ure)
a) 9otal population as per 2%%1 census : 1& DE''F 2or Goa
.) Projecte/ population 2or the Hear 2%%F : 1' 2F%%% 2or Goa
c) Gro,th rate per *ear: : (1'2F%%%$1&DE''F) 31%%
1&DE''F 3 F*rs.
/) Projecte/ population 2or the Hear 2%1% : 1' 2F%%% 3 (1 L2.')2
M 211%%E&D
e) Projecte/ population 2or north Goa in the Hear 2%1% : E 5F5E& 3 (1L2.')2
M #F&11%' $ A""re"ate /eman/
2) !ise in le+el o2 /isposa.le income :
Pa"e 5 o2 15
Course No. PGPM 21 Projects Formulation & Appraisal
Name: Senthil Kumar.M !e".No.2#$%1$&1$''#%$21%2(PGPPM)
Per capita income in the *ear$2%%%$%1 M!s. D#'#&
Per capita income in the *ear$2%%D$%5 M!s. 5F1FD
!ise in le+el o2 /isposa.le income M1EG
") Suppl* o2 primar* articles o2 consumption in the *ear$2%%1 M15'.#
(All -n/ia 2i".) -n the *ear$2%%5 M1E%.1
!ise in le+el o2 suppl* i.e. (L) F.D%G in the *ear$1##2 M5.F%0"
-n the *ear$2%%5 ME.2%0"
!ise in le+el o2 suppl* i.e. (L) 2D.1&G in the *ear$1##2 M1&.5%0"
-n the *ear$2%%5 M1'.&%0"
!ise in le+el o2 suppl* i.e. (L) 2%.EDG in the *ear$1##2 M2D.5%metre
-n the *ear$2%%5 M&1.D%metre
!ise in le+el o2 suppl* i.e. (L) 2F.1'G in the *ear$1##2 ME%#.%%"m
-n the *ear$2%%5 M'#%.%%"m
Fall in le+el o2 suppl* i.e. ($) 2.'EG
-) MPC8 2or ur.an area (all -n/ia) in the *ear$1#FE M1&#.E&
-n the *ear$2%%E M51E.25
Chan"e in MPC8 M 2.Etimes
Conclusion: (!e2. anne3ure no.l-)
1) From a.o+e stu/* ,e can project$ A""re"ate /eman/ M. (L) 2.'%G
2) From a.o+e stu/* ,e can project$ !ise in le+el o2 income M (L) 1E.%%G
&) From a.o+e stu/* ,e can project$ !ise in A""re"ate suppl* (a+".) M (L) 15.E5G
D) From a.o+e stu/* ,e can project$ !ise in MPC8 M (L) 2.E% times
@ence ,e project su22icient /eman/ e3ists that nee/s to .e 2ul2ille/.
Pa"e ' o2 15
Course No. PGPM 21 Projects Formulation & Appraisal
Name: Senthil Kumar.M !e".No.2#$%1$&1$''#%$21%2(PGPPM)
TECH&ICAL A&ALYI
"ETAIL OF FACILITIE*
9he propose/ shoppin" mall ma* ha+e outlets as /etaile/ .elo,
$ ?epartmental Store
$ Fashion an/ Shoes
$ @ealth an/ Beaut*
$ Foo/
$ Sports an/ out/oor
$ 8lectrical an/ phones
$ Ne,eller*s
$ Gi2ts an/ Music
$ Chil/ren
$ Miscellaneous
Arrangements (or process &tec+nical ,no-+o-*
A 9he project ,or0 ma* .e ta0en up on 8.P.C Contract .asis in a time .oun/ manner.
A 9echnical colla.oration ma* .e ma/e 2or commissionin" an/ trainin" o2 personnel.
A Karious s*stems such as cro,/ control /ispla* an/ in2ormation s*stems 2or shops
par0in" areas loun"e; passa"es are to .e pro+i/e/.
A Plants an/ Machineries 2or processin" material pac0a"in" la.elin" is re6uire/.
A Soun/ arran"ements 2or Po,er .ac0 up air$con/itionin" 8scalators capsule li2ts
,aste /isposal etc re6uire/ to .e planne/ compl*in" all the re"ulations.
Capacit' strateg'*
A 9he onl* limitin" 2actor 2rom a""re"ate /eman/ point o2 +ie, /iscusse/ in the last
chapter is population "ro,th rate. 9his is lesser than other -n/ian states; hence ,e shoul/
a/opt :C@AS-NG: strate"*.
A 9he projecte/ /eman/ an/ e3istin" /eman/ to .e /i+erte/ ma* ta0e lon"er time span.
Location o( ite*
A 9he project site is locate/ in the capital cit* o2 Panaji. 9he propose/ site is situate/ in
the 8?C Pla7a .ehin/ central .us stan/ an/ hence a +er* con+enient an/ cro,/ pullin"
location.
Pa"e E o2 15
Course No. PGPM 21 Projects Formulation & Appraisal
Name: Senthil Kumar.M !e".No.2#$%1$&1$''#%$21%2(PGPPM)
A Pro3imit* to mar0ets "eo"raphicall* the place is centrall* locate/ .et,een the t,o
/istricts o2 the state. 9he cit* is .ein" an important cultural political an/ economic centre
attracts si7ea.le population 2rom all o+er the state an/ hu"e 2lo, o2 /omestic an/
,orl/,i/e tourist rea/* to spen/.
A Pro3imit* to !a, material sources: 9he nei"h.orin" /istricts o2 Sin/hu/ur" Kolhapur
an/ Bel"aon o22ers cheap sources o2 commo/ities a"riculture pro/uce an/ /air* pro/ucts.
Suppl* o2 .e+era"es is locall* a+aila.le an/ 2urther can .e stren"thene/ throu"h tie up
,ith local pro/ucers. Suppl* o2 Consumer /ura.les Garments an/ te3tile pro/ucts can .e
/irectl* arran"e/ throu"h suppl* a"reements ,ith the manu2acturers.
A -n/ustrial in2rastructure: Goa has one o2 the .est in2rastructures in place. Cninterrupte/
po,er suppl* at reasona.le tari22 a/+ance/ telecommunication 2acilities !oa/ net,or0
,ith .etter 6ualit* ri/in" sur2ace Con+enient !ail,a* net,or0 pro3imit* to port an/
inlan/ na+i"ation are a+aila.le.
A Cr.an in2rastructure: Apart 2rom in/ustrial in2rastructure proper ur.an 2acilities are
a+aila.le such as housin" schoolin" hospitals .an0s etc.
A =a.our situation & A+aila.ilit*: 9he cit* .oasts .etter 6ualit* an/ e/ucate/ la.our 2orce
suita.le 2or tra/in" acti+ities. 9he le+el o2 la.our union acti+ism is lo, /ue to mi"ration
hetero"eneous mi3 o2 la.our 2orce 2rom /i22erent "eo"raph* etc.
A Go+t. policies: As per /ata pu.lishe/ .* !B- F?- 86uit* in2lo,s (2rom April 2%%% to
Septem.er 2%%F) in Goa are !S.1 %DEcrore ,hich is %.&&G o2 total F?- in2lo,s in -n/ia
an/ ran0s ninth in attractin" in+estment. 9his is 6uite si"ni2icant consi/erin" si7e o2 the
state an/ econom*.
A Climatic con/ition: 83cept t,o months o2 acti+e hea+* monsoon climate is mo/erate
an/ har/l* /isrupts economic acti+ities ta0in" place. -t /oes not pose an* si"ni2icant
challen"e to our propose/ .usiness.
Pa"e F o2 15
Course No. PGPM 21 Projects Formulation & Appraisal
Name: Senthil Kumar.M !e".No.2#$%1$&1$''#%$21%2(PGPPM)
Proposed ite
9he site is completel* /e+elope/ .* the 8?C (8conomic ?e+elopment
Corporation) o2 Goa. 9he site is a le+ele/ plot ,ith 2lat topo"raph*. -t is locate/
near the cit* entr* point an/ emer"in" 2ast as a central .usiness 7one. 9he place
has .ecome popular an/ +er* con+enient to the people all o+er Goa /ue to
location near the main .us stan/.
Man* o2 the .usiness acti+ities are concentrate/ in this area /ue to its suita.ilit*.
A 2oun/ation stratum is marsh* soil /ue to reclamation o2 .ac0,ater area an/
hence nee/s e3tra cost. Suppl* o2 po,er ,ater is a+aila.le in the +icinit* an/ a
,aste /isposal s*stem a+aila.le in the area.
.or, sc+edule planning*
9he ,or0 sche/ule shall .e thorou"hl* prepare/ an/ correlate/ to acti+ities an/ time
estimates.
Buil/in"s an/ Structures:
Follo,in" acti+ities re6uire/ ,ith /istinct an/ meticulous plannin" o2 the interior an/
e3terior. 9he total area re6uire/ as per .rea0 up ta.ulate/ here.
Sr. No. Sections Built up area !e6uirement in( S6mt)
1 ?epartmental stores &%%%.%%
2 Fashion an/ stores 5%%.%%
& @ealth an/ Beaut* 5%%.%%
D Foo/ 15%%.%%
5 Sports an/ >ut/oor 5%%.%%
' 8lectrical an/ phones 5%%.%%
E j,eller* 5%%.%%
F Gi2ts an/ usic 5%%.%%
# Chil/ren 5%%.%%
1% Miscellaneous 5%%.%%
11 A/ministration an/ Securit* 5%%.%%
12 Processin" & Pac0a"in" 1%%%.%%
1&
@ealth Kentilation an/ air
con/itionin" s*stem (@KAC)
5%%.%%
9otal 1%5%%.%%
1D Par0in" 5%%%.%%
Pa"e # o2 15
Course No. PGPM 21 Projects Formulation & Appraisal
Name: Senthil Kumar.M !e".No.2#$%1$&1$''#%$21%2(PGPPM)
FI&A&CIAL A&ALYI
COT OF P$O/ECT
Sr.
No.
Component
o2 Project
Ouantit* in
S6mt
Cnit rate I Cost percenta"e o2
/e+elopment
Cost
=an/ an/ Buil/in"
1 =an/ cost 1%%%%.%% 5%%%.%%I s6mt E2%%%%%%.%%
2
Buil/in"s
( ,ith area P
21%%.%% s6mt
per 2loor
Keepin" P
%.2 FS-
permissi.le
2or 2uture
nee/s)
1%5%%.%% 15%%%.%% I s6mt
E5%%%%%%.%%
2&E%%%%%.%%
&
Par0in" an/
=an/scape
?e+elopment
etc.
E#%%.%%
&%%%.%%Is6mt
&%%%.%%Is6mt
2&E%%%%%.%%
D
Architect I
Consultants
P 2G o2 (12& &)& &D1D%%%
>ther 83penses
1
Plants &
Machineries
Plant utilities
As per
6uotation
As per 6uotation
2%%%%%%%.%%
2
9echnical
Kno, $ ho,
2ee
As per 6uotation 5%%%%%%.%%
&
Misc. Fi3e/
assets
As per 6uotation 5%%%%%%.%%
Pa"e 1% o2 15
Course No. PGPM 21 Projects Formulation & Appraisal
Name: Senthil Kumar.M !e".No.2#$%1$&1$''#%$21%2(PGPPM)
D
Preliminar*
an/ capital
issue
e3penses
As per 6uotation 1%%%%%%.%%
9otal 2%511D%%%.%%
5
Pre >perati+e
83penses
P2G D1%22F%.%%
'
Pro+ision 2or
Contin"encies
P&G '15&D2%.%%
9otal Cost o2 the Project 215&'#E%%
Calculation o( $e0enue
Hear 1#1% 1#21 1#&1 1#D% 1#5% 1#'% 1#E1 1#F1 1##1 2%%1 2%11
Populatio
n Gro,th
!ate
2.&' (&.55) E.'2 E.%5 1.21 E.EE &D.EE 2'.ED 1'.%F 15.21
9hree
Months
Mo+in"
A+era"e
2.1D &.E1 5.2# 5.&D 1D.5F 2&.%# 25.F' 1#.&D
9,o
Months
Mo+in"
A+era"e
%.5# 2.%D E.&D D.1& D.D# 21.2E &%.E5 21.D1 15.'D
Population 2orecast o2 Hear 2%11
Sum o2 s6uare error (three months) M 2.1D2 L &.E12 L 5.2#2 L 5.&D2 L 1D.5F2 L 25.F'2
M 21'.F&
Pa"e 11 o2 15
Course No. PGPM 21 Projects Formulation & Appraisal
Name: Senthil Kumar.M !e".No.2#$%1$&1$''#%$21%2(PGPPM)
Sum o2 s6uare error (three months) M %.5#2 L 2.%D2 L E.&D2 L D.1&2 L D.D#2 L 21.2E2 L
&%.E52 L 21.D12
M 2D&.##
1. @ence ,e can assume population "ro,th rate applica.le to *ear 2%11 i.e.
1#.&DG /ue to lo,er a+era"e s6uare error i.e. 21'.F&
2. Projecte/ population in the *ear 2%11 i.e. 5% percenta"e o2 North Goa /istrict plus
5%G o2 south Goa /istrict ,hich ,ill ser+e as a consumer .ase.
(1 &D E''FI2) 3 1#.&D I 1%% M 2 '%'&F
83pecte/ sales per Month ( !e+enue)
@ere ,e assume 1%G o2 the population uses this mail mall to 2ul2ill their nee/s @ence
M 1%G 2'%'&F M 2'%'&.%% Nos. MPC8 2or Goa M !s. 1#ED.FF 2or ur.an -n/ia in the *ear
2%%E. (!e2. "roup o2 C9s as per ANN8QC!8 N>.)
83pecte/ sales per month M 2'%'&.%% nos 3 1#ED.FFI2 M 2 5E &5'DF.E2I$
@ence e3pecte/ sales per annum !s.&% FF 2EEF&.'%
Calculation o( Costs
Assumin" total cost P F%G o2 e3pecte/ sales per annum
Sr. No. -tem ?escription 8stimate/ Amount
1 9otal Material cost P '%G 1DF2&E&&'.%%
2 9otal utilities cost P 5G 12&5&111.%%
& 9otal =a.our cost P 1%G 2DE%'222.%%
D 9otal >+erhea/s P5G 12&5&111.%%
5 9otal ser+ice cost P 5G 12&5&111.%%
' 9otal A/ministrati+e cost P 5G 12&5&111.%%
E 9otal Sales 83penses P 5G 12&5&111.%%
F 9otal !o*alt* pa*a.le P55 12&5&.111.%%
# Gross 9otal 2DE%'222E.%%
Financial tructure
Mo/e o2 Finance Percenta"e Amount !s. -n Cr.
86uit* P 5%G 1%.EF
Pa"e 12 o2 15
Course No. PGPM 21 Projects Formulation & Appraisal
Name: Senthil Kumar.M !e".No.2#$%1$&1$''#%$21%2(PGPPM)
9erm =oan P 5%G 1%.EE
9otal 1%%G 21.55
Operating Cost -it+ Yearl' Brea,up
Cost o2 the project !s. 21 5& '#E%%.%%. Perio/ o2 completion o2 Project$ 2 Hear.
For the *ear en/in" ?ecem.er 2%11
>penin" Balance !s. &%FF2EEFD.'% L 112&225.%% !s. &%##51%%#.%%
A// $
Cash -nterest earne/ P #.5G on !s. 112&225 !s. 1%'E%'.%%
=ess
Cash 2or Purchase o2 material ,a"es an/ other e3penses !s. 2DE%'222E.%%
Cash !elease o2 securit* /eposit ( /e2ect lia.ilit* ) P 15G
o2 !s 215&'#E%%.%%
!s. &2&%5D55.%%
Cash 2or repa*ment o2 loan P 11G an/ %5 *ears term !s. &'2#1%D'.%%
Closin" Balance !s. (5'%1%1&)
For the *ear en/in" ?ecem.er 2%12
>penin" Balance !s. ( 5'%1%1&) L !s.
&%FF2EEFD.'%
!s. &%&22'EE1.%%
A//$
Cash -nterest earne/ N-=
=ess$
Cash 2or purchase o2 material ,a"es an/ other
e3penses
!s.2DE%'222E.%%
Cash$ 2or repa*ment o2 loan P 11G an/ %5 *ears
term
!s. &'2#1%D'.%%
Closin" Balance !s. 1#FE&D#F.%%
For the *ear en/in" ?ecem.er 2%1&
>penin" .alance !s. 1#FE&D#F.%% L!s.
&%FF2EEFD.'%
!s. &2FE%12F2.%%
Pa"e 1& o2 15
Course No. PGPM 21 Projects Formulation & Appraisal
Name: Senthil Kumar.M !e".No.2#$%1$&1$''#%$21%2(PGPPM)
A//$
Cash -nterest earne/ P#.5G on !s. 1#FE&D#F.%% !s. 1FFE#F2.%%
=ess$
Cash 2or purchase o2 material ,a"es an/ other
83penses
!s. 2DE%'222E.%%
Cash 2or repa*ment o2 loan P 11G an/ %5 *ears
term
!s.&'2#1%D'.%%
Closin" Balance !s. DE2&5##1.%%
E1AL!ATIO& OF FI&A&CIAL 1IABILITY
Pa' Bac, #et+od
Pa*.ac0 perio/ M cash in+estment I cash returne/ per *ear
For Cash in+estment o2 !s. 1% E' FDF5%.%% per annum
Cash returne/ in 2%12 is !s. 1 #F E&D#F.%%
Cash returne/ in 2%12 is !s. D E2 &5##1.%%

Cash to .e returne/ at the en/ o2 5th *ear M 1% E' FDF5%.%% 1 #F E&D#F.%%
D E2 &5##1.%% M D %5 E5&'1.%%
Assumin" earnin"s remain same in the si3th *ear perio/ re6uire/ to reco+er a.o+e
amount !s. (D %5 E5&'1.%% I D E2 &5##1.%%)I12 M 1%.& Sa* & Months
@ence Pa*.ac0 perio/ 2or the project is %5 *ears an/ 1% Months
Net Present Kalue Metho/
NPK M RCF1 I (1LK)S L RCF2 I (1LK)S L RCF& I (1LK)S LTup to CF5 -NK8S9
@ere PK1 M !s. 12 && %FF%%.5% I (1L %.11) M 11 1% F#%%#.5%
PK2 M !s. 11 2&225.%% I (1L %.11)2 M # 11'&D.%%
PK& M !s. (5' %1%1&) I (1L %.11)& M (D% #5 D2.D&)
PKD M !s. 1 #F E&D#F.%% I (1L %.11) M 1 &% #12FF.E%
PK5 M !s. D E2 &5##1.%% I (1L%.11) M 2 F% &22'1.5#
Sum o2 PKs M 1D #% 2FEF2.%%
@ence NPK M 1D #% 2FEF2.%% !s. 1% E' FDF5%.%% M !s. D 1& D&#&1.#'
As the +alue o2 NPK is Positi+e in+estment is a/+isa.le 2or the project.
Pa"e 1D o2 15
Course No. PGPM 21 Projects Formulation & Appraisal
Name: Senthil Kumar.M !e".No.2#$%1$&1$''#%$21%2(PGPPM)
$e(erences*
1. Project 2inancin" in corporate sector .* C.G. Karan/i0ar I G.M ?a+e
2. Construction Finance mana"ement (NCP 2#) .* N-CMA!
&. Project 2ormulation an/ Appraisal (PGPM 21) B* N-CMA!
D. <e.site: http:Iin/ia.u/"et.nic.in
5. <e.site: Census o2 -n/ia
'. NSS '&r/ !oun/ (Nul* 2%%' Nune 2%%E)
Pa"e 15 o2 15