You are on page 1of 115

CHAPTER 1
EXECUTIVE SUMMARY

A. Name of the Project


“Netbox” is the name of the business. Netbox means Internet in Boxes. This box
presents as an internet related business and customers can have an idea of what
services Netbox will offer. It is a two syllable name and can be easily remembered.
The name is not easily mistaken for another for it is unique.

B. Description of the industry


Our business is a Social Advertising services, a fairly new industry that all of
us are customers yet some of us have no idea. We all use Social Media and other
websites that have Advertisements in them. This the trend of the new age now,
Advertising online were people are now spending much of their time every day. We
are also going online with most of our activities like shopping etc. These days
the Internet is a commodity which many of us have come to depend on, people
want internet access that's available whenever they want or need to use it, as a
precious commodity and the foundation to any business

C. Description of the Project

Netbox is a Wi-fi service provider were the users will have advertisements pop
up on their gadgets when they are using it on a timely basis. We will target that
Netbox can cover the whole city so where ever users go they will still be connected to
Netbox. This is possible by connecting a series of Wifi mesh routers to a central
system that can sync all of the routers. We will set up a router grid that will be within
range of 50 meters wherever you are in our coverage. The project will be utilizing
multiple Fibr speed connections that will mesh together in order to provide high speed
internet access to our users. Access points will be spread throughout the city in a way
that only a maximum of 3 bounces will be needed in our wifi mesh in order to reach
an Access point. Customers can connect, using Netbox platforms that will be spread
all throughout the city with charges depending on the time they would like to connect.

1

Netbox will also provide advertising services to prospected clients, users who
connect will have advertisements as they are using the service, and these are paid
advertisements coming from clients. These advertisements will be broadcasted every
15 minutes on all the users in different areas.

D. Location of the project

Figure 1. Router Grid

Colored dots represents the Wifi mesh routers, they are arranged in a way that they
are within range of 100 meters wherever you are in this grid.
White dots with Circle represents the Access points, they are carefully placed that all
routers will be within range of 3 bounce from their nearest Access points.

Color/Area Coverage

Area 1- Red Santo Nino, Upper Balangasan

Area 2- Blue Upper Gatas, San Jose

2

Area 3- Yellow Santa Maria, Tuburan

Area 4- Green Balangasan, Dumagoc, West Santa Lucia

Area 5- Orange Santa Lucia, Gatas

Area 6- Pink San Francisco, Tuburan, Port area


Table 1. Location of Areas

E. Highlights of Major Assumptions

• Internet becoming a need for everyone in their daily routine, the trend of people
becoming dependent on internet is assumed. Access to internet is not free and this
aspects rises an opportunity to monetize this trend.
• Expected market share for internet users and advertising clients are 10.95%
equivalent to 5000 users and 4.89% equivalent to 192 clients respectively.
• The expected cost of the service is 6,031,969.90 PHP for 1 year.
• The expected selling price for internet users and advertising clients is 5 PHP and 300
PHP respectively. .
• The expected cost of the project is 4,669,200 PHP.
• The project will be financed by equity financing through contributions from the
partners.
• The internal rate of return is 66.095798%

F. Summary of findings and conclusions

Market Feasibility

The project is feasible in terms of the market. The study showed that there is
unsupplied demand of 44.06% of advertising businesses, the project can
accommodate 11.09% of the unsupplied demand representing 4.89% of the total
market. The market share for internet users is 10.95% based on capacity.

3

Technical Feasibility

The project is feasible in terms of technical aspect. The technology that can
support this project is existing and available for purchase. The expected price can
cover the cost of service enough to make a profit. The software can be developed to
integrate the applications needed for this project. The city government allows private
entities to place objects in posts in the city, provided that an annual fee is paid.

Management Feasibility
Netbox will be a partnership to be owned by 5 partners namely Ms. Cyden R.
Clavero, Mr. Nico L. Durangparang, Mr. Carl C. Fuerzas, Mr. Arman T. Tingson and
Ms. Roan Mae O. Uy. Mr. Carl C. Fuerzas acting as managing partner.

Financial Feasibility
The project is feasible in terms of financial operation. The payback period is
1.50 years. The net present value is 7271746.17 PHP. The profitability index is 2.59
and the internal rate of return is 66.095798%%. Return on sales is 26% and the return
on investment is 59% for the first year of operations.

Socio-economic feasibility
The projects provides a medium for people to connect and have access to
relevant information. It helps the economy grow by providing businesses a means of
an effective advertising, thus increasing customer awareness of their products and
attracting potential sales.

General Conclusion
Overall the project is feasible in all aspects of the study and provides
economic and social benefits to the owners, the users and the clients. The market is
existing and can be penetrated. The technology needed is available and legal
requirements can be complied. Based on the financial study, the cost of operations can
be recovered by the sale and make a profit. The project will be a general partnership
composing of 5 members’ equally contributing capital for the project.

4

Chapter II

Market Study

Netbox is an internet provider that serves accessible fast wireless fidelity throughout the

community of individual users which also offers a wide range advertisement services. The

intended users are the business entrepreneurs who are willing to promote their venture through

advertisement in the commercial market as well as the internet users which are tend to subscribe

the internet promo services. It caters the following barangay districts in Pagadian City such as

Balangasan, Gatas, San Francisco, San Jose, San Pedro, Santiago, Tuburan, Santa Maria, Santo

Niño and Dumagoc.

This chapter encompasses the demand, supply, demand and supply analysis, projected

market share, projected revenue and marketing strategies and programs of Netbox.

A. Study of Demand

Target Market

Internet access is becoming a commodity in our technologically advanced world.

Access to the internet provides users easy access to information and entertainment. It also

connects people from different parts of the world in an instant. Since Netbox will only be

within the area of Pagadian City, the residents of the city will be the target market. Netbox

also considers the age of the users. Only those who are from 15 years old to 64 years old

are the targeted markets which is equivalent to 59.8% of the population. This will cover

the following barangay districts such as Balangasan, Gatas, San Francisco, San Jose, San

Pedro, Santiago, Tuburan, Santa Maria, Santo Nino and Dumagoc.

5

Barangay Population Barangay Population


Balangasan 14995 Gatas 2458
San Francisco 4709 San Jose 7843
San Pedro 10711 Santiago 3871
Tuburan 9689 Santa Maria 5049
Santo Nino 9164 Dumagoc 8409
Total 77169
Table 1. Current Population of the Covered Barangays
Source: Philippine Statistical Authority

Based on the survey 96.27%, equivalent to 258 respondents access the internet. The

other 3.73%, corresponding 10 respondents rejected accessing the internet.

Netbox will also be a medium for advertisements for businesses. It is also offers

advertising services to the business entities who are willing to advertise their products and

services in a commercial market. The service is only available to those operating business

entities within Pagadian City.

The proponents conducted a survey of businesses in Pagadian City and it showed that

59.44%, equivalent to 148 of the businesses are currently advertising their products and

services. The remaining portion of 40.56% that rejected using any form of advertisements are

still willing to advertise if an opportunity arises.

Historical Demand

1. Demand for People Using the Internet

The demand can be gathered only within the chosen barangay districts covered by the

Netbox service in a form of conducting a sampling survey. The proponents have gathered the

following:

2013 2014 2015 2016 2017


Total 72 022 73 023 74 038 75 068 76 111
Table 2. Past Population of Covered Barangays
Source: Philippines Statistical Authority

6

Failure to obtain statistical data regarding past number of users of internet, the

historical demand is computed by multiplying the historical population to the percentage of

the age segment from 15 to 65 years old (59.8%) multiplied to the percentage (96.27%) of the

market accessing the internet. The resulting figure is the historical demand of people

accessing the internet.

44000 43816

43500 43216
43000 42623
42500
42038
42000
41462
41500
41000
40500
40000
2013 2014 2015 2016 2017

Population of Internet Users

Figure 1: Historical Demand of Internet Users

2. Businesses Advertising for the Past 5 Years

The demand for advertising of business entities in Pagadian City can be gathered by

surveying those established business enterprises located within the city proper, the results are

as follows:

2013 3165

2014 3457

2015 3743

2016 4855

2017 4771

Table 3. Number of Registered Business Entities

7

Failure to obtain statistical data regarding the past number of business entities

advertising, the historical demand is computed by multiplying the number of business entities

to the percentage (59.44%) of the business enterprises multiplied to the percentage (20.54%)

of the business firm advertising on contractual paid advertisements. It includes business

product advertising through radio and newspaper because they are the only services available

that offers contractual paid advertisements within the Pagadian City.

700
593 583
600
500 457
422
387
Number of Business

400
300
200
100
0
2013 2014 2015 2016 2017
Years

Population of Businesses Advertising on Radio and Newspaper

Figure 2: Historical Demand of Business Entities Advertising on Contractual Paid Advertisements

Past Demand Pattern

The historical demand of internet users is steadily growing, as people nowadays are

very dependent on the use of gadgets such as laptops, smartphones and etc. The need of

internet is also rising as it is becoming a daily need for people. The internet connects people

in a very large scale, it gives voice to everyone for us to hear. Internet is taking over the

world and Pagadian is not an exception to this. The people of Pagadian City are becoming

more and more dependent in the use of internet.

The historical demand of the business entities advertising in Pagadian City is

fluctuating, there is no obvious pattern to it. Through the years of 2013 to 2015, the number

of advertisers was steadily growing, but by the year 2016, many business enterprises started

8

to open and spike up the number of advertising entities. By the year 2017, it slows down to a

number smaller than the previous year.

Projected Demand

The projected population for 2018-2019 is based on the data provided by the

Philippine Statistics Authority (PSA). The projected population for 2018-2022 is computed

by multiplying the 2017 population by the growth rate provided by the PSA, which is

1.39008%. All other relevant data presented below are based on the computations from the

obtained historical demand calculations.

47500

46948
47000

46500 46304

46000
45670

45500

45044
45000

44426
44500

44000

43500

43000
2018 2019 2020 2021 2022

Projected Demand of Internet users

Figure 3: Projected Demand of Internet User

The projected number of business entities for 2018-2019 is based on the data provided

by the Permits and Licenses Division of Pagadian City. The projected number of business

9

entities advertising for the year of 2018 to 2022 was projected using Statistical Parabolic

which has the smallest deviation. (See Appendix). All other relevant data presented below are

based on the computations from the obtained historical demand calculations.

1000
912
900 848
784
800
722
700 661

600

500

400

300

200

100

0
2018 2019 2020 2021 2022

Number of Business Advertising on Radio and Newspaper

Figure 4: Projected Demand of Business Enterprises Advertising on Contractual Paid

Advertisements

Evaluation of Projected Demand

Projected demand for internet users was calculated by multiplying the population by

the growth rate provided by the Philippine Statistical Authority multiplied to the population

to the percentage of the age segment from 15 to 65 years old (59.8%) multiplied to the

percentage (96.27%) of the market accessing the internet.

10

48000
47000
46000
45000
Number of Users

44000
43000
42000
41000
40000
39000
38000
Years
Historical Demand Projected Demand

Figure 5: Evaluation of Projected Demand for Internet Users

Projected demand was obtained by projecting the number of business entities using the

statistical parabolic multiplying the number of businesses to the percentage (59.44%) of the

market advertising multiplied to the percentage (35.81%) of the market advertising on

Newspaper and Radio Stations.

1800

1600

1400

1200
Number of Business

1000

800

600

400

200

Years
Historical Demand Projected Demand

Figure 6: Evaluation of Projected Demand for Business Entities Advertising on Radio and Telephone

11

B. Study of Supply

Competitors

Netbox is a pioneer in the city wide public Wi-Fi, there is no existing entity

that provides the same service. Therefore, the proponents concluded that there is no

direct competitor for the service of internet provided by Netbox. Although there is no

such, there are still an existing indirect competitors such as Private Wi-Fi, Data, and

Internet Café. However, due to the complexity of the data, it is impossible to attain the

appropriate information needed. To solve this issue, the proponents devise its survey

questionnaire that will answer specifically to the demand of project.

On the other hand, in the advertising services of Netbox, there are already

existing entities provides advertising services such as Radio Stations and Newspapers. In

Pagadian City, these entities are already establishing for years. They are the direct

competitors for they also offer the same service of advertising.

Historical Supply

The figures are obtained through the interview and survey that the proponents

conducted on the said Radio Stations and Newspapers by the questions, “How many are

advertising on your platform?” The historical supply cannot be determined in an instant due

to the data provided in a yearly average. Because of the inadequacy of records, the data

needed is insufficient. Therefore, the historical supply will remain constant of what is

currently provided.

12

Number of Entities Advertising of their


Radio Station/ Newspaper Platform
Pagadian Times 35
The Monitor 15
DXPR 50
Radyo Natin FM 80
Baganian Broadcasting 30
DXRC FM energy 60
Brigada Mass Media Corp. 0
DXKV-FM 100
Total 370
Table 4. Number of Entities Advertising on Radio and Newspaper

Projected Supply

The projected supply for 2018 is based on the results of the survey conducted. The

projected supply for succeeding years is calculated by getting the average growth rate of

business which is 8.37% (See Appendix) multiplying it to the number of supply that have

gathered on the survey interview.

Number of Business Advertising on Radio and Newspaper


600

510
500 474
439
404
400 370

300

200

100

0
2018 2019 2020 2021 2022
Figure 7: Projected Supply of Business Entities Advertising on Contractual Paid Advertisement

13

Evaluation of Projected Supply

Projected supply can’t be calculated from the results of the interview and survey

materials conducted to the current suppliers. Using the growth rate of business, 8.37% (See

Appendix) in order to solve the matter and come up with the projection of the supply.

C. Demand-Supply Analysis

Demand Gap

Demand and Supply Gap Analysis is very essential in terms of analyzing current

market because it shows some of the market deficiencies or supply gap in order to assess of

how much product or service that can still serve for the satisfaction of demand. The gap is

calculated by subtracting projected supply from projected demand. The table below shows

the available market for the next 5 years:

Year Projected Demand


2018 44,426
2019 45,044
2020 45,670
2021 46,304
2022 46,948
Total 228,392
Table 5: Demand for Internet Users

Year Projected Demand Projected Supply Demand Gap


2018 661.36503 370 291.365
2019 722.15271 404.0076 318.1451
2020 784.23077 438.73711 345.4937
2021 847.59922 474.18853 373.4107
2022 912.25806 510.36185 401.8962
Total 3927.6058 2197.2951 1730.311
Table 6: Demand Gap for Business Entities Advertising on Contractual Paid Advertisements

14

Market Share

The market share can be projected by analyzing the demand and supply gap data. It is

the portion of excess supply that is currently not satisfied by the existing supply. However,

due the capacity of the services provided, it cannot accommodate all of the demand gap.

Based on the capacity of 192 clients dividing it to the total projected demand, the prospected

market share is 4.89%

MARKET SHARE FOR CONTRACTUAL


PAID ADVERTISEMENTS
Market
Share, 4.89%

Unsatisfied
Demand,
Supplied,
39.17%
55.94%

Figure 8: Market Share of Business Entities for Contractual Paid Advertisements

The market share for internet users is calculated by multiplying the projected demand

of internet users to the percentage based on the conducted survey that was affirmative in

using a platform such as Netbox. The prospected market share of internet users is 89.55% of

the projected demand. However due to normal capacity of 5,000 users only 10.95% of the

unsupplied demand ca be catered.

MARKET SHARE OF INTERNET


USERS

Market
Share
Unsupplied 10.95%
Demand,
89.05%

Figure 9: Market Share for Individual User

15

D. Price Study

Table 5. Costing base on capacity of 5,000 users per month

Attributed to Internet Users


Pricing Total Per unit
Direct Material
31,905.59 0.02

Overhead
Electricity
136,974.50 0.08
Depreciation
99,604.86 0.05
Internet Fee
3,600,000.00 1.97
Vendo Rent
120,000.00 0.07
Router Placement Fee
152,500.00 0.08
Amortization
25,000.00 0.01
Maintenance
50,000.00 0.03
Total
2.31
Mark-up
2.15
Taxable Price (VAT)
4.46
Price Including Tax
5.00

In computing the price, the possible cost is estimated by considering the direct materials such
as the user-pass receipt, the Overhead for the electricity expense and the fixed cost consisting
of the Internet fees, yearly rental of posts where the routers will be placed, vendo rent
amortization of the intangible asset and maintenance cost. The decided price is 5.00 for 24
hours of connection with no data limit. The proponents came up with a mark-up of 2.15 (See
computation above) for the 24 hour connection. The decided price of 5.00 is set for Netbox to
firmly establish itself as a daily commodity that everyone will need on their day to day life.

16

Table 6. Pricing for the advertisements based on capacity of 192 clients

Attributed to Advertising Clients


Pricing
Direct Material
31,905.59 3.46
Overhead
Electricity
136,974.50 14.86
Depreciation
99,604.86 10.81
Internet Fee
1,200,000.00 130.21
Vendo Rent
120,000.00 13.02
Router Placement Fee
152,500.00 16.55
Amortization
25,000.00 2.71
Maintenance
50,000.00 5.43
Total
197.05
Mark-up
70.81
Taxable Price (VAT)
267.86
Price Including Vat
300.00

The proponents have decided on this prices based on the results of the survey. This
prices are very competitive with the existing supply of the competitors. Every 15 minutes
Netbox will broadcast to all its users in different areas advertisements of the entities. One spot
is one broadcast of the advertisement of the entity.

E. Marketing Strategies and Programs

Product/Service Strategy

Accessing and browsing to the different internet sites is becoming a necessity


for every individual. It is a means of communication, entertainment, news source and in
general a ways for us to connect with the rest of the world. And this need does not come
for free. Every individual in our society today owns gadgets that can access the internet

17

be it a smartphone, laptops and etc. The need for internet is very high for us people in a
technologically advancing world. There will be a great demand for cheap internet. And
Netbox can provide that. Netbox will be seen as the more economical option for people
accessing the internet.

With Netbox having so many users, it will also be a platform to inform, to


spread, to communicate with the users. With this many entities or businesses would like
to grab on to that opportunity to spread their own agenda by advertising via image or
video. Radio stations and Newspaper have been slowly declining in popularity, their
listeners and readers is slowly declining in numbers, unlike the Internet which is the
future of information technology with it becoming part of our daily routine to check on
our phones to see what’s up and what’s happening. Netbox will help the local economy
grow by enhancing the speed of which information is spread in the City. With a
centralized Wi-Fi, everyone can be reach out.

Pricing Strategy

Netbox will offer a service were the price is so low that you can afford to use it every
day. With prices of data load not that affordable for users to be able to use it on a daily basis
and maintain an economical budget. With Netbox, you can enjoy daily access to internet
while still maintaining a budget. And for the pricing of the Advertisements, they are very
competitive with the existing market today. Netbox prices are significantly more economical
than what is being offered by the competitors, with Netbox being able to reach out to more
people this means that more people will be able to see or hear their advertisements.

Promotion and Advertising Strategy

Netbox will be a new business in Pagadian City, people will need to know what is it
and how it works. Promotion and advertising will play a major role to the success of Netbox,
to build a recognition on the users and to gain their loyalty.

To advertise Netbox, the proponents will use a mix method of conventional and
online promotion and advertising; social media, tarpaulins, flyers and leaflets. Broadcasting
the service of Netbox and the very cheap price of internet access through the use these
methods creating customer awareness and leave a good impression to our users.

18

To promote the advertising, Netbox will broadcast to its users blank Ad space here for
potential customers to see. In the Ad space here will be the proponents contact information
for inquiries regarding the services.

Place Strategy

Netbox will cover barangays near the center of Pagadian City were most of the people
live. The Barangays covered are Balangasan, Gatas, San Francisco, San Jose, San Pedro,
Santiago, Tuburan, Santa Maria, Santo Nino and Dumagoc. Wi-Fi mesh Routers will be
strategically place so that wherever you are in the Grid system you are within 50 meters from
the closest router.

Vendo machines will also be spread throughout the city where users can gain access
to the system. An office will be setup to accommodate potential advertising entities and to
customer services, this will be located in Barangay San Francisco near Saint Columban
College

Conclusion on Market Study

The Market study showed that there is a demand on our service and that the existing
supply was not sufficient to meet the demand. There is demand gap for the current period and
the projected periods to come. The expected price for the internet access is 5 PHP for a 24 hour
connection with no data limit, and for the advertising price is 300 PHP. The marketing
strategies to be adopted are both conventional and new, the proponents have decided to
advertise by means of tarpaulin posting, flyers and online.

19

Chapter III

Technical Study

A. Service Description

Internet access is usually provided by either wired connection or wireless access points.
Netbox will provide wireless access to users using wired connections provided by internet
service providers. Vendo machines will be spread throughout the city on designated locations,
this Vendo boxes will be the platform on where users can connect to Netbox. Upon dropping
a coin to the machine, a receipt will come out with a unique code which users can use to connect
and gain access to the Wi-Fi. The users first must need to connect to the Wi-Fi and upon
connection they will be directed to an application where they can input the unique code
provided by the machine to enable them to gain access to the internet.

The proponents aim to make access very easy and fast, to be able to do this a customer
friendly user-interface should be implemented. Also, the proponents aim to provide fast and
reliable access to the internet. Fiber connections will be used to achieve this goal.

Netbox will also be an advertising platform. Clients which are business and entities will
be able to promote and advertise their product, agenda or services on our platform. The clients
can advertise via image or a video. Their advertisements will pop-up on the users who are
connected to Netbox, showing their advertisement of either image or video. Their
advertisement will be shown for 3 seconds before the user has an option to close it or skip the
ads. Scheduled advertisements will be broadcast in the designated area in every 15 minutes.

20

Mesh Network

A mesh network is a group of routers all in sync to provide internet to a wide range of
area. This mesh networks works like a basketball team the routers being the players, the data
signal being the basketball and the access points being the ring. The routers will receive the
data signal from the users and passes it to the next nearest router until it reaches an access point.
This is possible by using mesh routers, they are routers that have processors in their board, in
a way they are mini computers themselves. The routers due process themselves; the router finds
the nearest point to pass the data signal coming from users.

Figure 1.0 Mesh Network

21

B. Service Process User-Network process

Figure 2.0 User-Network Interactions

Users can connect to Netbox by dropping a 5 peso coin, the Vendo machine will print
out a receipt with a unique code which the users will use to log in to the application that the
users will download only on their first connection to Netbox, this said application will
authenticate the said unique code and the users can gain access to the internet. The unique code
is produced by the software installed on the Vendo machine, this unique code will be passed to
the central network and the central network will integrate it to the network and pass it to all the
access points so the user will be able to connect to all routers wherever he may be situated.

22

The image below is the interface of the software of the Vendo machines which will produce
the unique code and control the time on which users can gain access to Netbox.

Figure 2.1 Interface of Etcher

This is the interface of Etcher, software that is use for controlled Wi-Fi access. This
software is free and can be easily downloaded online. This software can produce unique codes
which the users may use to log in to Netbox, the unique code can be used only by a single
device and will automatically disconnect the user after the time expires. This software can also
control the connection of the user to the internet as to time it allows it to connect. This software
will be installed on the Vendo machines.

23

Figure 2.2 User Interface of Netbox Application

The Wi-Fi of Netbox will be open requiring no password to connect. However for the
users to gain access to the internet they must log in on the application that will be automatically
installed on their first time connecting to Netbox. This application is where the users will input
the unique code provided. This application will also serve as the means Netbox can inject
advertisements to the users. The application will be required to be kept open in the background
in order the users can continue to gain access to the internet.

The unique password entered on this application will automatically connect you to
another router in the case you move to another place. The technology that will enable the
syncing of unique codes of all routers is called Passpoint. Passpoint syncs all the unique codes
of users among the routers and the servers.

24

Figure 2.3 Client-Network Interactions

The client will directly go to the front office to acquire for advertisements service; they
will provide the advertisement in either image or video to the personnel in the office. The client
will subscribe on what plan the clients intends to choose and pay the fees that encompasses
with it. After the front office receives that advertisement from the clients, the front office shall
submit it to the central network. The central network will then be in charge of broadcasting the
advertisement base on the agreed terms. If any issues arise the clients can forward their
complaints or suggestions to the front office.

Figure 2.4 User-interface of the advertising software.

This software will integrate all the routers in the mesh network. This software will also
be used to inject advertisements to the gadgets of the users. The advertisements from different
entities will be broadcasted according to schedule.

25

C. Plant Capacity

The proponents will use 20 fiber connections for the access points. Each fiber
connections will have a speed of 1 gigabit, and divided by 8 equals to the effective download
speed of 125 megabytes per second. This speed can cater 250 at most, any more than these
users will already experience lag and latencies. So Netbox will have a capacity of only 5000
users. Future plans to add more access points will add to the capacity with increments of 250
users.

Netbox will be broadcasting 4 advertisements in an hour with interval of 15 minutes


from each other in 6 different areas. Each area will be broadcasted different advertisements.
To get the maximum advertisement Netbox can broadcast in a day, 4 advertisements in an hour
multiplied by 24hours a day then multiplied by 6 areas, a maximum 576 advertisements can be
broadcasted. With this maximum capacity of advertisements, Netbox can cater up to only 192
clients for each client must have at least 3 spots of advertisements in a day.

Area 1 Area 2 Area 3 Area 4 Area 5 Area6


8:00 AM Entity 1 Entity 2 Entity 3 Entity 4 Entity 5 Entity 6
8:15 AM Entity 7 Entity 8 Entity 9 Entity 10 Entity 11 Entity 12
8:30 AM Entity 13 Entity 14 Entity 15 Entity 16 Entity 17 Entity 18
8:45 AM Entity 19 Entity 20 Entity 21 Entity 22 Entity 23 Entity 24
9:00 AM Entity 25 Entity 26 Entity 27 Entity 28 Entity 29 Entity 30
9:15 AM Entity 31 Entity 32 Entity 33 Entity 34 Entity 35 Entity 36
9:30 AM Entity 37 Entity 38 Entity 39 Entity 40 Entity 41 Entity 42
9:45 AM Entity 43 Entity 44 Entity 45 Entity 46 Entity 47 Entity 48
10:00 AM Entity 49 Entity 50 Entity 51 Entity 52 Entity 53 Entity 54
10:15 AM Entity 55 Entity 55 Entity 57 Entity 58 Entity 59 Entity 60
10:30 AM Entity 61 Entity 62 Entity 63 Entity 64 Entity 65 Entity 66
10:45 AM Entity 67 Entity 68 Entity 69 Entity 70 Entity 71 Entity 72
11:00 AM Entity 73 Entity 74 Entity 75 Entity 76 Entity 77 Entity 78
11:15 AM Entity 79 Entity 80 Entity 81 Entity 82 Entity 83 Entity 84
11:30 AM Entity 85 Entity 86 Entity 87 Entity 88 Entity 89 Entity 90
11:45 AM Entity 91 Entity 92 Entity 93 Entity 94 Entity 95 Entity 96
12:00 PM Entity 97 Entity 98 Entity 99 Entity 100 Entity 101 Entity 102
12:15 PM Entity 103 Entity 104 Entity 105 Entity 106 Entity 107 Entity 108
12:30 PM Entity 109 Entity 110 Entity 111 Entity 112 Entity 113 Entity 114
12:45 PM Entity 115 Entity 116 Entity 117 Entity 118 Entity 119 Entity 120
1:00 PM Entity 121 Entity 122 Entity 123 Entity 124 Entity 125 Entity 126

26

1:15 PM Entity 127 Entity 128 Entity 129 Entity 130 Entity 131 Entity 132
1:30 PM Entity 133 Entity 134 Entity 135 Entity 136 Entity 137 Entity 138
1:45 PM Entity 139 Entity 140 Entity 141 Entity 142 Entity 143 Entity 144
2:00 PM Entity 145 Entity 146 Entity 147 Entity 148 Entity 149 Entity 150
2:15 PM Entity 151 Entity 152 Entity 153 Entity 154 Entity 155 Entity 156
2:30 PM Entity 157 Entity 158 Entity 159 Entity 160 Entity 161 Entity 162
2:45 PM Entity 163 Entity 164 Entity 165 Entity 166 Entity 167 Entity 168
3:00 PM Entity 169 Entity 170 Entity 171 Entity 172 Entity 173 Entity 174
3:15 PM Entity 175 Entity 176 Entity 177 Entity 178 Entity 179 Entity 180
3:30 PM Entity 181 Entity 182 Entity 183 Entity 184 Entity 185 Entity 186
3:45 PM Entity 187 Entity 188 Entity 189 Entity 190 Entity 191 Entity 192

Table 1.0 Advertising Schedule

The table presents the advertising schedule in different areas and in different times.
After 3:45 PM, the schedule will go back to the restart and start from the beginning but now
entity 1 will start at area 2 and area 1 will be broadcasted with another advertisement, this
schedule will go on a cycle endlessly. This schedule will satisfy the 3 pop-ups of
advertisements by all the clients.

D. Production Schedule

Netbox is operating with a maximum capacity of only 15,000 users because of the
limitations of the internet speed. If maximum capacity is reach during operations, additional
access points will be installed adding increments of 250 users per installation. The routers have
currently a maximum capacity of 100 users per single router, totaling to a maximum capacity
of 30,500. The proponents decided to keep a 2:3 ratio of internet capacity to router capacity,
this is so that users can easily gain access to the routers and maintaining an optimal speed of
the internet achieving the goal of high speed internet and accessibility. At the current capacity
of the routers, no additional routers are needed unless maximum capacity of the internet is met
and additional access points are added and such it reached a capacity of 22,500 users at this

27

point additional routers are needed to accommodate new users and keeping the quality of
service to our users.

Internet Capacity Routers Capacity

Current Capacity 5,000 30,500

Increments of additional units 250 100

Ratio to be maintained 2 3

Table 2.0 Capacity and Increments of additional units

Software Development

All the applications and software’s needed for the project is existing and can be
downloaded for free online. The problem arises when integrating all of the needed applications
and software’s into one operating system. A software needs to be developed to make a system
for Netbox. G2 Software Solutions located on San Francisco District, Pagadian City have
testified that a program can be developed and programed for a cost of PHP 500,000.

Government Requirements

The city government allows private entities or individuals to place objects on posts in
the city, provided that an annual fee of 1,000 per placement is paid. This allows the router to
be placed on posts located in the city. An annual payment schedule is provided:

Numbers of Routers Annual Fee Total Annual Cost

305 1000 305,000

Table 2.1 Router placement fee

28

E. Plant Location and Layout

Figure 3.0 Router and Vendo Machines layout

The grid is the layout of the routers, placing them in designated places. Each colored
dot represents a router. The routers are place 100 meters apart from each other. This placement
will put the users within 50 meters of the nearest router, achieving the goal of accessibility and
convenient access. The routers will be placed on poles or high grounds to prevent any structure
to obstructing the signal.

The dots are colored in six different colors. Each color represents an area, namely the
following:

Color/Area Coverage
Area 1- Red Santo Nino, Upper Balangasan
Area 2- Blue Upper Gatas, San Jose
Area 3- Yellow Santa Maria, Tuburan
Area 4- Green Balangasan, Dumagoc, West Santa Lucia
Area 5- Orange Santa Lucia, Gatas
Area 6- Pink San Francisco, Tuburan, Port area

Table 3.0 Area and Coverage

29

The advertisements will be broadcasted on this areas base on a planned schedule. The
areas will be broadcasted with different advertisements to maximize the capacity of clients
Netbox can accommodate. The users will be broadcasted based on routers the users are
connected to, users who are connected to routers on area 1 wil be broadcasted advertisements
intended for area 1, and the same to area 2, 3, 4, 5 and 6.

The white dots are the places where the Vendo machines will be installed. The Vendo
machines are places so that each barangay covered by Netbox will be placed with Vendo
machine to achieve the goal of accessibility. This Vendo machines will also be access points
on which internet is directly connected from the internet service provider.

30

3D View of Office

Figure 3.1 Front View with Measurement

Figure 3.2 Bird’s eye view

31

Figure 3.3 Layout with measurement

Figure 3.4 Designated areas

32

Figure 3.5 Office location

The Front office will serve as the façade of Netbox, this place where clients and users
can inquire and acquire the services of Netbox. The front office will be located at J. Zulueta St.
near Chamber School, Dao District, Pagadian City. The front office will house 4 personnel:
Manager, Treasurer, and Head Technician and customer relations personnel.

The Central network will only be a single room with a server and a single computer
inside. The central network will be located at the back of the Front Office, and this room will
be air conditioned to maintain a cool environment for the equipment’s to work properly.

33

Description Amount Total


1. Foundation
Cement ₱11,280.00
Sand 1,679.30
Gravel 3,358.60 ₱16,317.90
2. Masonry
CBH(4inch) ₱29,070.00
Cement 26,160.00
Sand 4,165.00
Steel Bars(10mm*6m) 9,460.00 68,855.00
3. Roofing System
Purlins, Bolts, Steel Frame and other Accessories ₱150,000.00 150,000.00

4. Flooring
Cement for Mortar ₱4,800.00
Tiles 150,000.00 154,800.00
5. Painting
Paint (4 gal) ₱10,000.00 10,000.00
6. Labor
Material Handling and Labor ₱50,000.00 50,000.00

Overall Cost ₱449,972.00


Contingency Consideration in work (15%) 67,495.00

Total Est. Cost ₱517,468.00

Table 3.1 Estimated building cost

34

F. PLANT & MACHINERIES EQUIPMENT

1. Vendo Machines
Name Raspberry Pi 3 model B+

a. Price ₱ 2,499.00

Seller Argon Gadget Shop

Quantity 20pcs.
Required
Function Will serve as the computer for
the Vendo machines.

b.

Name Universal Coin slot


Price ₱ 750.00
Seller Pc Mock

Quantity 20pcs.
Required
Function Coin slot

c.
Name LCD Touch Screen
Price ₱ 3,650.00
Seller RS Philippines
Size 7 inches
Quantity 20pcs.
Required
Function User interface touch pad.

35

d.

Name: Vendo Machine Frame


Price ₱ 1,500.00
Seller Shenyang Cami Tech
Quantity 20pcs
Required
Function To house the Vendo
machine.

Name Receipt Printer

e. Price ₱ 1,169.00

Seller POS Pro

Quantity 20pcs.
Required
Function Prints code In receipts

2. ROUTERS

a.
Name Open-Mesh OM2P-HS

Price ₱ 6,400.00

Seller Aits Technology

Quantity 305pcs.
Required
Function Routers for the Mesh Network

36

b
Name TP-Link TL-ANT2408CL

Price ₱ 600.00

Seller Common Prime

Quantity 305pcs.
Required
Function To receive the signal from
users.

c.

Name GD-8017 Solar Kit

Price ₱ 500.00

Seller Hetech

Quantity 305pcs.
Required
Function To provide power to the
routers.

Name Outdoor Enclosure


d. Price ₱ 600.00
Seller Data Alliance
Quantity Required 305pcs.
Function To protect the router
from environmental
factors

37

3. Server Room

a.

Name Intel Xeon E3-1220

Price ₱ 12, 999.00

Seller IT World

Function Processor

b.
Name Asrock H61M-VG4

Price ₱ 3,200.00

Seller All Digital Ph

Function Motherboard

Name Kingston Hyper X 8GB x 2


c.

Price ₱ 7,640.00

Seller Rad101 Tech

Function Random Access Memory

38

d
Name Aerocool Rave 80+ 500 W

Price ₱ 1,998.00

Seller Vivocom Inc.

Function Power Supply Unit

e.
Name Rakk Huwani Case

Price ₱ 1,998.00

Seller Rakk PH

Function Chassis

f.

Name AOC1220SWD

Price ₱ 5,888.00

Seller PCworx

Function Monitor

39

g.
Name MT-K9310

Price ₱ 370.00

Seller Wonderbuy PH

Function Keyboard

h.
Name Logitech B1000

Price ₱ 199.00

Seller Tech 27

Function Mouse

40

Office Supplies

Office Supplies Supplier Price (PHP)


Long Bond paper Crown Paper & Stationaries Supply ₱210/ ream

Short Bond paper Crown Paper & Stationaries Supply ₱170/ ream

Ball pen Crown Paper & Stationaries Supply ₱5.00 each

Puncher Crown Paper & Stationaries Supply ₱50.00

Stapler Crown Paper & Stationaries Supply ₱150.00

Whiteboard Crown Paper & Stationaries Supply ₱450.00

Whiteboard Marker Crown Paper & Stationaries Supply ₱45.00

Long Folder Crown Paper & Stationaries Supply ₱7.75

Short Folder Crown Paper & Stationaries Supply ₱7.00 00

Printer Ink Crown Paper & Stationaries Supply ₱334.00

Scissors Crown Paper & Stationaries Supply ₱225.00

Table 4.0 Office supplies

Office Cleaning Supplies Supplier Prices (PHP)


Broom Best Emporium 120.00
Mop Best Emporium 150.00
Dust pan Best Emporium 35.00
Trash Can Best Emporium 90.00
Pail Best Emporium 320.00
Table 4.1 Cleaning supplies

41

Other Office Supplies Supplier Price

Florescent bulb Lazada Philippines ₱1, 299.00/ 6 tubes

Fire extinguisher Lazada Philippines ₱999.00 each

Table 4.2 Office supplies

Office Equipment Supplier Amount

Water Dispenser Lazada Philippines ₱ 3,998.00


Air Conditioner Lazada Philippines ₱8,000.00

Printer Lazada Philippines ₱5,998.00

Table 4.3 Office Equipment

Office Furniture and Fixtures Supplier Price


Front Desk table Lazada Philippines ₱4,399.00
Chairs Lazada Philippines ₱320.00
Employee wide table Lazada Philippines ₱10,000.00
Wide table divider Lazada Philippines ₱1,500.00
Managers Table Lazada Philippines ₱5,250.00
Sofa chair Lazada Philippines ₱5,000.00
Computer Table Lazada Philippines ₱1,000.00

Table 4.4 Furniture and Fixture

42

G. UTILITIES

Netbox is a service entity. The service process and managing of the business use
different utilities:

Electricity. Used in the operations of the entity, in its service process and administration. The
following tables show the electricity cost consumed by the utilities used in the office and
Vendo machines. The routers are solar powered and they do not require electricity.

Equipment Unit(s) Electricity Hours Days per Power(K Price per Annual Cost
Consumption( year used WH/yr) KWH
W)

PC with 4 200 8 313 2,003.20 ₱10.7837 ₱ 21,601.91


Monitor
Air 2 510 8 313 2,554.08 ₱10.7837 27,542.43
Conditioning
Water 1 90 8 313 225.36 ₱10.7837 2,430.21
Dispenser
Printer 1 175 8 313 438.20 ₱10.7837 4,725.42

Server 1 500 24 365 4,380.00 ₱10.7837 47,232.61


Computer
Vendo 20 120 24 365 21,024.0 ₱10.7837 226,716.51
Machines 0
Total ₱330,249.09

Table 5.0 Equipment electricity consumption

Internet Services. For the access points

INTERNET
Monthly Cost Quantity Annual Cost
Access points ₱ 20, 000 20 ₱4,800,000

Table 5.1 Internet expenditure

Router placement fees

Annual Fee Quantity Annual Cost


Router ₱ 1,000 305 ₱305,000

Table 5.2 Placement expenditure

43

Water

Department No.of Water Total Monthly Commercial Minimum


personnel consumpti consumption Consumption Rate Charge
on l/ day (cu. m)

Office 5 3 15 0.45 233.00 ₱225.00

Table 5.3 Water consumption

H. Service Cost Requirements

Depreciation

Equipment’s used are subject to deprecation and is in need of adjustments per year.

Equipment Cost Salvage Quantity Useful Life Annual


Value Depreciation
Selling and Administration

Building ₱517,468.00 0 1 20yrs ₱25,873.40

PC with Monitor ₱14,290.00 ₱2,000.00 4 5yrs 9,832.00

Air Conditioner ₱8,000.00 0 2 15yrs 1,067.00

Car ₱100,000.00 0 1 5yrs 20,000.00


Total ₱56,772.00
Service Operations
Vendo Machine ₱10,068.00 0 20 7yrs ₱28,765.71

Routers ₱8,100.00 0 305 15yrs 164,700.00

Server Computer ₱33,723.00 ₱5,000.00 1 5yrs 5,744.00

Total ₱199,209.71

Table 6.0 Equipment depreciation

Direct Materials

Price per Roll Receipt per Roll Direct Material/User


Receipt 15 PHP 429 0.02

Table 6.1 Materials Expenditure

44

Overhead

Based on 5,000 capacity per day.

Overhead Total Per user


Electricity ₱136,974.50 ₱0.08
Depreciation ₱99,604.86 0.05
Internet Fee ₱3,600,000.00 1.97
Vendo Rent ₱120,000.00 0.07
Router Placement Fee ₱152,500.00 0.08
Amortization ₱25,000.00 0.01
Maintenance ₱50,000.00 0.03
Total ₱2.31

Table 6.2 Overhead expenditure in Individual user

Based on 192 capacity per week

Electricity ₱136,974.50 ₱14.86


Depreciation ₱99,604.86 10.81
Internet Fee ₱1,200,000.00 130.21
Vendo Rent ₱120,000.00 13.02
Router Placement Fee ₱152,500.00 16.55
Amortization ₱25,000.00 2.71
Maintenance ₱50,000.00 5.43
Total ₱197.05
Table 6.3 Overhead expenditure in advertising client

Price cost

Individual User Total Advertising client Total


Direct Material ₱0.02 ₱3.46
Overhead

Electricity 0.08 14.86


Depreciation 0.05 10.81
Internet Fee 1.97 130.21

45

Vendo Rent 0.07 13.02


Router 0.08 16.55
Placement Fee
Amortization 0.01 2.71
Maintenance 0.03 ₱2.31 5.43 ₱197.05

Mark-up 2.15 70.81


Taxable Price 4.46 267.86
(VAT)
VAT Amount 54 32.14
Price Including ₱5.00 ₱300.00
Tax

Table 6.4 Price costing

I. Waste Disposal

Waste management is collection, transportation, and disposal of garbage, sewage and


other waste products. The Vendo machines of Netbox will print out receipts to the users. And
once used it is usually thrown right away. And in order to properly dispose of the garbage,
garbage cans will be placed beside all Vendo machines.

J. Pre-Operation Activities

Step 1 Secure Permit from City Government

A permit for the placement of routers in public poles and areas must be
first secured from the city government. A letter addressed to the City Mayor
must sent asking permission for the placing of the routers, after the said letter is
approved it must be forwarded to the City Administrator to be signed by Mr,
Lauro Mendoza, after it a Permit can be secured from the Permits and License
Division after payment to the City Treasurer.

Step 2 Assembling the Router Packs

The antennas are attached to the routers. The power cord of the router is
plug in then the router is place inside the enclosure. The solar panel is then
screwed at the top of the enclosure.

46

Step 3 Placing the Routers in the Electric Post

Each of the assembled routers is placed 1 foot above the transformer and tightly
bolts in the electric post.

Figure 4.0 Routers Placement

Step 4 Assembling the Vendo Machine

Figure 4.1 assembling the board of the Vendo Machine

The assembled board is then placed inside the machine frame. Then the Touchpad
display is installed on the frame and connected to the board. Paint designs after.

Step 5 Installations of Vendo Machines and Access Point

The Vendo machines will be installed throughout the city to provide easy access to
Netbox. The assembled Vendo machines will be placed on designated areas. The Vendo
machines will be secured by chains and bolts. The Ethernet from the ISP will be connected to
the Vendo machine to enable it to gain access to the network. Routers themselves don’t provide
internet they must be able to connect to an access point to be able to provide internet to users.
Access points are wired internet connections provided by the internet service provided. They

47

are installed on the Vendo machine so the access point will be powered and easy access for
maintenance. They are to be placed so that the routers will be able to reach an access points
within 3 bounce from a single router to another

Step 6 Setting up the Routers

The mesh routers are set up on high places like poles and high buildings. They are
placed 50 meters away from the nearest connecting router, this is because laptops Smartphones
have an effective range of 100 meters with a clear line of sight. Placing routers nearer than the
optimal range will give users a convenient and stable connection. Routers will be mounted on
to poles and walls using railings and bolts. The power source of the routers is 12V batteries
that will be Solar powered. The routers will be encased by an outdoor weather case to protect
the routers from environmental factors.

Step 7 Setup Etchers and Passpoint Software

This software will be installed on the Vendo Machines and routers. Etcher is the
software that will produce the unique code and control the time users can connect. While
Passpoint will sync all the unique codes from different access points so that whenever a user
changes location and his current routers is out of range, his gadget can automatically connect
to the next nearest router.

Step 8 Setting up The Central Network

A central network base will be establish, in order to monitor and manage the mesh
network. A powerful computer with high process speed shall be the server for the mesh
network. Software called Mesh Manager shall be installed on the central network, this software
will receive the data from the access points and pass it to other access points in order to sync
all the data so that users can connect to different routers in different areas in the city.

Step 9 Software Integration

The software is installed on the mesh network to sync all the routers. The software is
responsible for the broadcasting of advertisements and the syncing of all unique codes in all
routers, so users can connect easily.

48

Figure 4.2 Pre-operating process

Conclusion of Technical Study

The Project is feasible in terms of technical aspect. The technology needed for this
project is existing and available. The mesh network together with its other components is
available in the market and can easily purchase. Through time the system will be increasing
capacity little by little until the whole city will be covered and can lead of for the extension to
other places. The system needs maintenance to preserve its performance in order to make the
customer satisfied. More satisfied customer, more profit.

49

Chapter IV
Management Study

A. Business Organization

Type of Business
Netbox being a service oriented entity focuses on the quality of service it provides to

its customers. Netbox will be a general partnership form of business organization, consisting

of 5 general partners who will contribute the necessary resources for its formation to provide a

large capital base. It also provides more room for growth as to capital needs.

The profits and losses resulting from the operations during the course of the business

will be divided among the partners by allocating 10% interest based on their beginning capital

contributions, the remainder divided equally among themselves.

A managing partner will be appointed from among the partners, by doing so the one

managing the day to day operations of the business will have more commitment to the entity

for he is a partner. And the managing partner will be a given salary of 25,000 per month and a

bonus of 10% of sales exceeding 1,500,000. A performance based bonus will motivate the

managing partner to do his best.

On the long run, in the relevant future probably 5 years the possibility of dissolution of

the partnership is high. The entity will dissolve the partnership in order to create a corporation,

if the partners agree. The event happening is based on the capacity of the business to expand

its operations. When the capital outlay needed to meet the demand is greater and the partners

cannot supply the gap because of capital limitations, there will be a need to expand.

50

B. Organizational Structure

Partners

Managing Partner

Head Treasurer Secretary/Front Desk


Technician personnel

Assistant
technician

Figure 1 Organizational Structure

C. Capital Requirement

The partners are to contribute equal share in the capital with the exception of the managing

partner bringing in his expertise in the field.

Partner Capital Investment Profit and Loss Total Investment


Ratio
Clavero, Cyden ₱ 933,840.00 20% ₱ 933,840.00
Durangparang, Nico ₱ 933,840.00 20% ₱ 933,840.00
Fuerzas, Carl Joseph ₱ 933,840.00 20% ₱ 933,840.00
Tingson, Arman ₱ 933,840.00 20% ₱ 933,840.00
Uy, Roan Mae ₱ 933,840.00 20% ₱ 933,840.00
Total ₱ 4,669,200.00
Table 4.1 Profit Sharing and Capital Investment

51

D. Staffing Requirements

Manpower Requirement and Job Description:

a) Head Technician (1)

He/She will be the one to perform needed repairs and maintenance on the server and

the routers, he will also collect the coins from the vendo boxes in the city. Requirements are:

1. Must be a graduate of any 4 year computer related course.(eg. Information technology,

Computer Science)

2. Must be knowledgeable in the field of Wireless Fidelity technology.

3. At least 20-35 years old. (NO RESTRICTION AS TO GENDER)

4. Must know how to drive a car or a motorcycle

5. Applicants must be willing to work full time

b) Assistant Technician (1)

He/She will assist the Head Technician and he is under the command of the Head of technician.

1. Must at least be a 2nd year student in any computer related course. (eg. Information

technology, Computer Science)

2. Must be knowledgeable in the field of Wireless Fidelity technology.

3. At least 20-35 years old. (NO RESTRICTION AS TO GENDER)

4. Must know how to drive a car or a motorcycle

5. Applicants must be willing to work full time

52

c) Treasurer (1)

The one tasked to manage the books of the company and keep records.

1. Must be a holder of a Bachelor’s Degree in Accountancy.

2. At least 1 year of working experience in any finance related job.

3. At least 20-35 years old. (NO RESTRICTION AS TO GENDER

4. Applicants must be willing to work full time

d) Secretary/ Front Desk personnel (1)

He/She will be the one to accommodate walk-in customers and clients. To make and keep any

documents necessary for the business and to entertain any complaints from users and clients.

1. Must be a College Graduate of any course.

2. At least 1 year of working experience in any finance related job.

3. At least 20-35 years old. (NO RESTRICTION AS TO GENDER

4. Applicants must be willing to work full time.

Recruitment and Training Program

Netbox being a business that relies on its quality of service emphasizes the skills and

knowledge of the head technician to be able to produce the best experience for the users. The

technician must be always updated on the latest technologies regarding the service of providing

internet. The technician shall be sent to seminars and training programs necessary for the

improvement of the business.

53

Management and Policies Regulation

The management will be strict on timeliness of the employees. They must be on time on their

job and their duties. Absences will be dealt with penalties by deduction in their salary if not for

a valid reason. Efficiency and effectiveness of their duties is upmost importance in their day to

day routine in the office.

E. Compensation and Other Benefits

General and Administrative

Position Basic Monthly Pay Total Annual

Head Technician ₱ 20,000.00 ₱ 20,000.00 ₱ 260,000

Assistant Technician ₱ 15,000.00 ₱ 15,000.00 ₱ 195,000

Accountant ₱ 18,000.00 ₱ 18,000.00 ₱ 234,000

Secretary ₱ 18,000.00 ₱ 18,000.00 ₱ 234,000

Table 4.2 Compensation

Total Benefits for employees

SSS premium Payable 4,834.80

Philhealth Payable 1,010.63

Pag-ibig Payable 735.00

54

A. Gantt Chart

Week 1 2 3 4 1 2 3 4 1 2 3
Activity Month January February March
1. Securing Permits and Licenses
2. Hiring of Staff and Personnel’s
3. Application to the Internet Service Provider
4. Purchase of Equipment and Parts
5. Assembling of Router Packs
6. Planning of Router Placements
7. Purchase Furniture’s and Equipment for Office
8. Purchase Equipment for Central Network
9. Assembling of Vendo Machines
10. Installing of Vendo Machines and Access Points
11. Installation of Routers
12. Moving to Office
13. Advertisements and Promotions
14. Setup Etcher and Passpoint Software
15. Assembly and Setup of Central Network
16. Integrating the whole mesh network
17. Run tests
18. Start of Operation

55

F. Conclusion

The business to be formed is a general partnership consisting of 5 partners with 1 being

appointed as a managing partner. The partners are to share equal amounts of the net profit of

the company with the managing partner being given a monthly salary. The business will

employ a total of 4 employees namely the Head Technician, Assistant technician, Treasurer

and a Secretary. They are to be given bountiful salary to justify their performance and to

compensate their commitment to the vision of the business.

56

57

Chapter V
Financial Study

A. Major Assumptions
1. Income Statement
- The method of reporting for the income statement is absorption costing.

2. Market Share
-The market share is based on the capacity of plant..
3. Selling Price
- 5 PHP price is set for internet users based on the survey conducted.
- 300 PHP price is set for advertising clients based on the survey conducted. Price is
increased annually by 6% based on inflation.
4. Plant Capacity
- User capacity is 250 based on network limit of the access points. Capacity is increased by
increments of 250 users by year.
- Client capacity is 192 based on time limit of advertising schedule.
5. Cost of Service

Direct Materials
- The method used to account for materials is periodic inventory system
Overhead
- The basis for computation of overhead is the annual estimated cost of service
attributable to the operation.
6. VAT
Since the projected annual gross sales of our business are expected to be more than the VAT
threshold of P3, 000,000, this means that our business is required to register under VAT
system. Under this we are engaged into variable sales which means that we are required to
collect 12% value added tax on our sales from our users and clients and that the same time
avail Input VAT and deduct the same from the Output VAT to get the VAT payable.

7. Inflation Rate
- The inflation rate used is 6%. This is based on the general average rate in the
country.

58

8. Salability of service
- The salability of the internet service is 96.27% based on the results of the survey
who answered YES on both questions of “Are they connecting to the internet” and
“Are you willing to connect a city wide Wi-Fi”
-Based on our capacity of 192 clients dividing it to the total projected demand, our
prospected market share is 4.89%.

9. Salaries and Wages


- Working Days: 26 days
- The settlement of the salaries will be every 15 days, which is every 15th and 30th day
of the month.
10, Depreciation and Amortization
- The method of depreciation to be used for all depreciable item of the entity is the

Straight-line method.
11. Light and Water
- Light and water will be paid monthly and will be accounted as one line item-
UTILITIES EXPENSE together with other utilities
12. Office Supplies
- This will be purchased on cash. All office supplies are expected to be fully consume
as of the end of the year.

13. Provisions for Income Tax


- Provisions for Income Tax will be 30% of the annual net income before tax.
- Income taxes are paid every 15th day of April after each accounting period.

14. Cash Revenue


- All internet users will be cash sales
15. Accounts Receivables
- All clients will be subscriptions of 1 year payable every 15th of the month.
16. Allowance for Bad Debts
- Bad debts are assumed to 5% of accounts receivable ending balance.
17. Employee Benefits
- SSS, Philhealth and Pag-ibig Premium payable are payable monthly.

59

18. Cash in Bank


-Cash on hand is fixed at 300,000 to meet monthly expenses, the balance is deposited
in the bank
19. Withdrawals
- 100% of share in profit is permanently withdrawn by the partners to reduce the risk
of maintaining big amount of cash balances.
20. Profit Distribution
- The profits and losses resulting from the operations during the course of the business
will be divided among the partners by allocating 10% interest based on their beginning
capital contributions, the remainder divided equally among themselves. And the managing
partner will be given a salary of 20,000 per month and a bonus of 10% of sales exceeding
1,500,000.

60

B. Project Cost Assumptions

Total
Land
Purchase Price 80,000.00
Legal Fees 15,000.00
Registration Fees 5,000.00 100,000.00
Building
Foundation 16,317.00
Masonry 68,855.00
Roofing System 150,000.00
Flooring 154,800.00
Painting 10,000.00
Labor 50,000.00
Contingency Works 67,495.80 517,467.80
Equipment
Routers 2,501,000.00
Vendo Machine 201,360.00
Computers 90,883.00
Air Conditioner 16,000.00
Water Dispenser 3,999.00
Printer 5,998.00 2,819,240.00
Motor Vehicle Car 100,000.00 100,000.00
Office Furniture and Fixtures
Front Desk table 4,399.00
Chairs 1,920.00
Employee wide table 10,000.00
Wide table divider 1,500.00
Managers Table 5,250.00
Sofa chair 5,000.00
Server Computer Table 1,000.00 29,069.00
Intangible Asset
Software Development 500,000.00 500,000.00
Other Non-Current Assets
Internet Deposit 200,000.00
Router Placement deposit 20,000.00 220,000.00
Initial Working Capital
Cash on Hand 300,000.00
Unused Office Supplies 7,273.20 307,273.20
Pre-operating Expenses
Feasibility Study Cost 6,150.00
Business Permit 5,000.00
Registration Fee with SEC 15,000.00
Initial Advertising 20,000.00
Recruitment and Training 30,000.00 76,150.00
Total Cost 4,669,200.00

61

Cash on Hand:
Payment for Internet 200,000
Payment for Salary 71,000
Payment of Utilities expense 4,920
Contingent Expenses 24,080
Total P300,000

C. Source of Financing

Table 2. Source of Financing


The capital requirement will mostly be provided by the partners and the remaining
will be financed by a loan from the bank.
The partners are to contribute equal share in the capital.

Partner Capital Profit and Loss Total Investment


Investment Ratio

Clavero, Cyden 20%


933,840.00 933,840.00

Durangparang, Nico 20%


933,840.00 933,840.00

Fuerzas, Carl Joseph 20%


933,840.00 933,840.00

Tingson, Arman 20%


933,840.00 933,840.00

Uy, Roan Mae 20%


933,840.00 933,840.00

Total
4,669,200.00

62

63

D. Financial Statements

Netbox Co.
Statement of Comprehensive Income
For the years ended 31 December 2020-2024
Note 2020 2021 2022 2023 2024
Sales 10 10,615,892.86 11,300,999.11 12,189,788.39 13,086,806.25 13,975,595.54
Cost of Service 11 5,469,714.64 6,022,439.19 6,320,320.87 6,620,640.52 6,923,544.43
Gross Profit 5,146,178.22 5,278,559.91 5,869,467.52 6,466,165.73 7,052,051.11
Less: Expenses
Pre-operating expenses 12 76,150.00
General and Administration Expenses
Bad Debts 13 23,040.00 691.20 691.20 768.00 691.20
Permits and Licenses 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
Salaries and Wages 14 923,000.00 923,000.00 923,000.00 923,000.00 923,000.00
Depreciation expense 15 52,753.87 52,753.87 52,753.87 52,753.87 52,753.87
Office Supplies expense 16 7,274.00 7,492.22 7,716.99 7,948.50 8,186.95
Utilities Expense 17 50,468.75 51,982.81 53,542.30 55,148.57 56,803.02
SSS Premium Expense 18 58,017.60 58,017.60 58,017.60 58,017.60 58,017.60
Philhealth Premium Expense 19 12,127.50 12,127.50 12,127.50 12,127.50 12,127.50
PAG-IBIG Premium Expense 20 8,820.00 8,820.00 8,820.00 8,820.00 8,820.00
Insurance Expense 21 18,000.00 19,080.00 20,224.80 21,438.29 22,724.59
Total General and Administration Expenses 1,158,501.72 1,138,965.20 1,141,894.25 1,145,022.32 1,148,124.73
Selling expenses
Advertising Expense 21 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00
Total Selling expense 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00
Total Expenses 1,178,501.72 1,158,965.20 1,161,894.25 1,165,022.32 1,168,124.73
Net Profit before tax 3,967,676.50 4,119,594.71 4,707,573.27 5,301,143.41 5,883,926.38
Tax 30% 1,190,302.95 1,235,878.41 1,412,271.98 1,590,343.02 1,765,177.91
Net Profit after tax 2,777,373.55 2,883,716.30 3,295,301.29 3,710,800.39 4,118,748.47

64

Netbox Co.
Statement of Financial Position
as of 31 December 2020-2024

Note Year 0 2020 2021 2022 2023 2024


Current Assets
Cash 3 300,000.00 1,835,427.10 2,162,517.25 2,630,950.90 3,103,426.59 3,575,917.04
Trade and other Receivables 4 - 207,360.00 213,580.80 219,801.60 226,713.60 232,934.40
Prepaid Expenses 5 83,424.00 - - - - -
Materials Inventory 11 - 14,454.30 26,059.88 34,816.75 40,724.90 43,784.34
Total Current Assets 383,424.00 2,057,241.40 2,402,157.93 2,885,569.25 3,370,865.09 3,852,635.78
Non-Current Assets
Property, Plant and Equipment 6 3,565,776.00 3,314,879.09 3,063,982.18 2,813,085.27 2,562,188.36 2,311,291.45
Intangible Asset 7 500,000.00 450,000.00 400,000.00 350,000.00 300,000.00 250,000.00
Other Non-Current Assets 8 220,000.00 220,000.00 220,000.00 220,000.00 220,000.00 220,000.00
Total Non-current assets 4,285,776.00 3,984,879.09 3,683,982.18 3,383,085.27 3,082,188.36 2,781,291.45
TOTAL ASSETS 4,669,200.00 6,042,120.49 6,086,140.11 6,268,654.52 6,453,053.45 6,633,927.23
Current Liabilities
Trade and other payables 8 - 1,372,920.49 1,416,940.11 1,599,454.52 1,783,853.45 1,964,727.23
Total Current Liabilities - 1,372,920.49 1,416,940.11 1,599,454.52 1,783,853.45 1,964,727.23
Partner's Equity
Clavero, Capital 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00
Durangparang, Capital 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00
Fuerzas, Capital 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00
Tingson, Capital 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00
Uy, Capital 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00
Total Partner's Equity 4,669,200.00 4,669,200.00 4,669,200.00 4,669,200.00 4,669,200.00 4,669,200.00
TOTAL LIABILITIES AND EQUITY 4,669,200.00 6,042,120.49 6,086,140.11 6,268,654.52 6,453,053.45 6,633,927.23

65

Netbox Co.
Statement of Cash Flows
Year ended 31 December 2020-2024
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Cash flows from operating activities

Net Income after tax - 2,777,373.55 2,883,716.30 3,295,301.29 3,710,800.39 4,118,748.47

Amortization 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00

Depreciation 250,896.91 250,896.91 250,896.91 250,896.91 250,896.91

Net Cash Inflow 3,078,270.46 3,184,613.21 3,596,198.20 4,011,697.30 4,419,645.38

Decrease(Increase) in receivables - (207,360.00) (6,220.80) (6,220.80) (6,912.00) (6,220.80)


Decrease(Increase) in Materials
Inventory - (14,454.30) (11,605.58) (8,756.87) (5,908.15) (3,059.44)

Decrease(Increase) in prepaid expenses (83,424.00) 83,424.00 - - - -


Increase(Decrease) in income tax
payable 1,190,302.95 45,575.46 176,393.57 178,071.04 174,834.89

Increase(Decrease) in VAT tax payable - 176,037.11 (1,555.85) 6,120.84 6,327.89 6,038.89


Increase(Decrease) in SSS premium
payable 4,834.80 - - - -

Increase(Decrease) Philhealth Payable 1,010.63 - - - -

Increase(Decrease) PAG-IBIG Payable 735.00 - - - -


Net cash provided by operating
activities (83,424.00) 4,312,800.65 3,210,806.45 3,763,734.94 4,183,276.08 4,591,238.91
Cash flows from investing activities

66

Purchase of Land 100,000.00 - - - - -

Construction of Building 517,468.00 - - - - -

Purchase of Intangible Asset 500,000.00 - - - - -

Purchase of Motor Vehicle 100,000.00 - - - - -

Purchase of Equipment’s 2,819,239.00 - - - - -

Purchase of furniture and fixtures 29,069.00 - - - - -

Down payment for Internet 200,000.00

Down payment for Router Placement 20,000.00

Net cash used in financing activities 4,285,776.00 - - - - -


Cash flows from financing activities

Initial Investment 4,669,200.00

Withdrawal - 2,777,373.55 2,883,716.30 3,295,301.29 3,710,800.39 4,118,748.47


Net cash provided by financing
activities 4,669,200.00 (2,777,373.55) (2,883,716.30) (3,295,301.29) (3,710,800.39) (4,118,748.47)

Increase in cash equivalents 300,000.00 1,535,427.10 327,090.15 468,433.65 472,475.69 472,490.45

Add: Cash and cash equivalents- Jan 1 - 300,000.00 1,835,427.10 2,162,517.25 2,630,950.90 3,103,426.59

Cash and cash equivalents- Dec 31 300,000.00 1,835,427.10 2,162,517.25 2,630,950.90 3,103,426.59 3,575,917.04

67

Netbox Co.
Statement of Changes in Equity
For the year ended 31 December 2020-2024
2020 Clavero Durangparang Fuerzas Tingson Uy

Original Investment 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00

Add: Share in Profit 481,927.24 481,927.24 849,664.59 481,927.24 481,927.24

Balances: 1,415,767.24 1,415,767.24 1,783,504.59 1,415,767.24 1,415,767.24


Less: Permanent
Withdrawals 481,927.24 481,927.24 849,664.59 481,927.24 481,927.24
Partner’s Equity
12/31/2020 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00
2021 Clavero Durangparang Fuerzas Tingson Uy

Parner's Equity 12/31/2020 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00

Add: Share in Profit 501,068.93 501,068.93 879,440.56 501,068.93 501,068.93

Balances: 1,434,908.93 1,434,908.93 1,813,280.56 1,434,908.93 1,434,908.93


Less: Permanent
Withdrawals 501,068.93 501,068.93 879,440.56 501,068.93 501,068.93
Partner’s Equity
12/31/2021 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00
2022 Clavero Durangparang Fuerzas Tingson Uy
Partner’s Equity
12/31/2021 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00

Add: Share in Profit 575,154.23 575,154.23 994,684.36 575,154.23 575,154.23

Balances: 1,508,994.23 1,508,994.23 1,928,524.36 1,508,994.23 1,508,994.23


Less: Permanent
Withdrawals 575,154.23 575,154.23 994,684.36 575,154.23 575,154.23

68

Partner’s Equity
12/31/2022 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00
2023 Clavero Durangparang Fuerzas Tingson Uy
Partner’s Equity
12/31/2022 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00

Add: Share in Profit 649,944.07 649,944.07 1,111,024.11 649,944.07 649,944.07

Balances: 1,583,784.07 1,583,784.07 2,044,864.11 1,583,784.07 1,583,784.07


Less: Permanent
Withdrawals 649,944.07 649,944.07 1,111,024.11 649,944.07 649,944.07
Partner’s Equity
12/31/2023 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00
2024 Clavero Durangparang Fuerzas Tingson Uy
Partner’s Equity
12/31/2023 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00

Add: Share in Profit 723,374.72 723,374.72 1,225,249.57 723,374.72 723,374.72

Balances: 1,657,214.72 1,657,214.72 2,159,089.57 1,657,214.72 1,657,214.72


Less: Permanent
Withdrawals 723,374.72 723,374.72 1,225,249.57 723,374.72 723,374.72
Partner’s Equity
12/31/2024 933,840.00 933,840.00 933,840.00 933,840.00 933,840.00

69

Notes to Financial Statements

1. Compliance with Philippine Financial Reporting Standards


The entity’s financial statements have been prepared in accordance with Philippine Financial Reporting Standards and rules and regulations of
the Philippine Securities and Exchange Commission.
The accounting policies implemented in the preparation of financial statements have been applied by the entity in a consistent basis.

2. Summary of significant accounting policies


• Measurement Basis- The financial statements are prepared on a historical cost basis
• Materials Inventories- measured at acquisition cost
• Pre-operating expenses- such costs are charge to expense in the year incurred
• Property, plant and equipment- PPE are recorded at cost
-Depreciation- the depreciation used for all depreciable items is the straight line method.
• Employee benefits- the entity maintains a defined contribution plan which provides for benefits including Pag-ibig, SSS, and Phil-
health covering all regular employees.
•Income Taxes- income tax on the profit for the year comprises current tax only. Current income tax is the expected tax payable on the
taxable income for the year using tax rates enacted or substantially enacted as of the reporting date and any adjustment to tax payable in

Respect to previous years

70

Note 3- Cash Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Cash on Hand 300,000.00 300,000.00 300,000.00 300,000.00 300,000.00 300,000.00

Cash in Bank - 1,535,427.10 1,862,517.25 2,330,950.90 2,803,426.59 3,275,917.04

Total 300,000.00 1,835,427.10 2,162,517.25 2,630,950.90 3,103,426.59 3,575,917.04

Note 4- Trade and other receivables (Refer to Financial Schedule- Accounts


Receivable)
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Accounts Receivables - 230,400.00 237,312.00 244,224.00 251,904.00 258,816.00

Less: Allowance for bad debts - 23,040.00 23,731.20 24,422.40 25,190.40 25,881.60

Total - 207,360.00 213,580.80 219,801.60 226,713.60 232,934.40

Note 5- Prepaid Expenses Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Pre-operating expenses 76,150.00 - - - - -

Unused Office Supplies 7,274.00

Total 83,424.00 - - - - -

71

Note 6- Property, plant and Equipment


Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Land 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00
Building 517,468.00 517,468.00 517,468.00 517,468.00 517,468.00 517,468.00
Machinery and Equipment 2,819,239.00 2,819,239.00 2,819,239.00 2,819,239.00 2,819,239.00 2,819,239.00
Office Furniture and Fixtures 29,069.00 29,069.00 29,069.00 29,069.00 29,069.00 29,069.00
Motor Vehicle 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00
Total 3,565,776.00 3,565,776.00 3,565,776.00 3,565,776.00 3,565,776.00 3,565,776.00
Accumulated Depreciation - 250,896.91 501,793.82 752,690.73 1,003,587.64 1,254,484.55
Carrying Amount 3,565,776.00 3,314,879.09 3,063,982.18 2,813,085.27 2,562,188.36 2,311,291.45
Accumulated Depreciation
Building - 25,873.40 51,746.80 77,620.20 103,493.60 129,367.00
Machinery and Equipment - 199,209.71 398,419.42 597,629.13 796,838.84 996,048.55
Office Furniture and Fixtures - 5,813.80 11,627.60 17,441.40 23,255.20 29,069.00
Motor Vehicle - 20,000.00 40,000.00 60,000.00 80,000.00 100,000.00
Total Accumulated
Depreciation - 250,896.91 501,793.82 752,690.73 1,003,587.64 1,254,484.55

Note 7- Intangible Asset Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Software 500,000.00 500,000.00 500,000.00 500,000.00 500,000.00 500,000.00


Accumulated Amortization 50,000.00 100,000.00 150,000.00 200,000.00 250,000.00

Carrying Amount 500,000.00 450,000.00 400,000.00 350,000.00 300,000.00 250,000.00

72

Note 8- Other Non-Current


Assets Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Internet Down payment
200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00
Router Placement Down payment
20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00
Total
220,000.00 220,000.00 220,000.00 220,000.00 220,000.00 220,000.00

Note 9- Trade and other payables (Refer to Financial Schedule- Tax Payable)
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
1,190,302.95 1,235,878.41 1,412,271.98 1,590,343.02 1,765,177.91
Income Tax Payable
176,037.11 174481.2613 180602.1039 186929.9965 192968.8839
Vat Payable
4,834.80 4,834.80 4,834.80 4,834.80 4,834.80
SSS premium Payable
1,010.63 1,010.63 1,010.63 1,010.63 1,010.63
Philhealth Payable
735 735 735 735 735
Pag-ibig Payable
1,372,920.49 1,416,940.11 1,599,454.52 1,783,853.45 1,964,727.23
Total

73

Note 10- Sales


Total Sales for Internet Users
Year Annual Users Price
2020 1,825,000.00 5.00 9,125,000.00
2021 1,961,875.00 5.00 9,809,375.00
2022 2,144,375.00 5.00 10,721,875.00
2023 2,326,875.00 5.00 11,634,375.00
2024 2,509,375.00 5.00 12,546,875.00
Year Annual Clients Price Total Sales for Clients
2020 9,216.00 300.00 2,764,800.00
2021 9,216.00 309.00 2,847,744.00
2022 9,216.00 318.00 2,930,688.00
2023 9,216.00 328.00 3,022,848.00
2024 9,216.00 337.00 3,105,792.00

Year Internet Users Clients Total Sales Revenue Sales Exclusive of VAT
2020 9,125,000.00 2,764,800.00 11,889,800.00 10,615,892.86
2021 9,809,375.00 2,847,744.00 12,657,119.00 11,300,999.11
2022 10,721,875.00 2,930,688.00 13,652,563.00 12,189,788.39
2023 11,634,375.00 3,022,848.00 14,657,223.00 13,086,806.25
2024 12,546,875.00 3,105,792.00 15,652,667.00 13,975,595.54

74

Note 11- Cost of Service


Direct Materials- Receipt 2020 2021 2022 2023 2024

Materials Inventory, beginning - 14,454.30 26,059.88 34,816.75 40,724.90

Add: Purchases 71,428.57 71,428.57 71,428.57 71,428.57 71,428.57

Total available for use 71,428.57 85,882.87 97,488.45 106,245.32 112,153.47

Less: Materials Inventory, end 14,454.30 26,059.88 34,816.75 40,724.90 43,784.34

Direct Materials Used 56,974.28 59,822.99 62,671.70 65,520.42 68,369.13


Overhead

Electricity 244,597.32 259,273.16 274,829.55 291,319.32 308,798.48

Depreciation 198,143.04 198,143.04 198,143.04 198,143.04 198,143.04

Internet Fee 4,285,714.29 4,797,257.14 5,051,657.14 5,306,057.14 5,560,457.14

Vendo Rent 240,000.00 240,000.00 240,000.00 240,000.00 240,000.00

Router Placement Fee 305,000.00 323,300.00 342,698.00 363,259.88 385,055.47

Amortization 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00

Maintenance 89,285.71 94,642.86 100,321.43 106,340.71 112,721.16

Total Overhead 5,412,740.36 5,962,616.20 6,257,649.17 6,555,120.10 6,855,175.30

Direct Materials 56,974.28 59,822.99 62,671.70 65,520.42 68,369.13

75

Overhead 5,412,740.36 5,962,616.20 6,257,649.17 6,555,120.10 6,855,175.30

Cost of Service 5,469,714.64 6,022,439.19 6,320,320.87 6,620,640.52 6,923,544.43

Note 12- Pre-operating service


Pre-operating Expenses
Feasibility Study Cost 6,150.00
Business Permit 5,000.00
Registration Fee with SEC 15,000.00
Initial Advertising 20,000.00
Recruitment and Training 30,000.00 76,150.00
Total 76,150.00

Note 13- Bad Debts 2020 2021 2022 2023 2024

AFDA, beg - 23,040.00 23,731.20 24,422.40 25,190.40

Add: Bad Debts 23,040.00 691.20 691.20 768.00 691.20

AFDA, end 23,040.00 23,731.20 24,422.40 25,190.40 25,881.60

76

Note 14- General and Administration- Salaries and Wages


2020 2021 2022 2023 2024

Head Technician 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00

Assistant Technician 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00

Treasurer 18,000.00 18,000.00 18,000.00 18,000.00 18,000.00

Secretary 18,000.00 18,000.00 18,000.00 18,000.00 18,000.00

Total 71,000.00 71,000.00 71,000.00 71,000.00 71,000.00

Per Year 923,000.00 923,000.00 923,000.00 923,000.00 923,000.00

Note 15- General and Administration- Depreciation Expense


2020 2021 2022 2023 2024
Air conditioner 1,066.67 1,066.67 1,066.67 1,066.67 1,066.67
Building 25,873.40 25,873.40 25,873.40 25,873.40 25,873.40
Office Furniture and
Fixtures 5,813.80 5,813.80 5,813.80 5,813.80 5,813.80
Motor Vehicle 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00
Total 52,753.87 52,753.87 52,753.87 52,753.87 52,753.87

77

Note 16- Office Supplies


Expense
2020 2021 2022 2023 2024
Office Supplies 5,856.25 6,031.94 6,212.90 6,399.28 6,591.26
Office Cleaning
Supplies 638.39 657.54 677.27 697.59 718.52
Total 7,274.00 7,492.22 7,716.99 7,948.50 8,186.95

Note 17- Utilities


Expense- Gen. and
Admin
2020 2021 2022 2023 2024

Electricity 50,267.86 51,775.89 53,329.17 54,929.04 56,576.92

Water 200.89 206.92 213.13 219.52 226.11

Total 50,468.75 51,982.81 53,542.30 55,148.57 56,803.02

Note 18- SSS Premium Expense- Gen. and Admin


Employee Basic monthly pay Employee Employer
Head Technician 20,000.00 581.30 1,208.70
Assistant Technician 15,000.00 581.30 1,208.70
Treasurer 18,000.00 581.30 1,208.70
Secretary 18,000.00 581.30 1,208.70
Per month 4,834.80
Per year 58,017.60

78

Note 19- Philhealth Premium Expense- Gen. and Admin


Employee Basic monthly pay Employee Employer
Head Technician 22,500.00 309.38 309.38
Assistant Technician 15,000.00 206.25 206.25
Treasurer 18,000.00 247.50 247.50
Secretary 18,000.00 247.50 247.50
Per month 1,010.63
Per year 12,127.50

Note 20- PAG-IBIG Premium Expense- Gen. and Admin


Employee Basic monthly pay Employee Employer
Head Technician 22,500.00 225.00 225.00
Assistant Technician 15,000.00 150.00 150.00
Treasurer 18,000.00 180.00 180.00
Secretary 18,000.00 180.00 180.00
Per month 735.00
Per year 8,820.00

Note 21- Insurance Expense


Annual
Monthly Payment Payment

Building Insurance 1,500.00 18,000.00

79

Note 22- Advertising


Expense
2020 2021 2022 2023 2024

Flyers and leaflets 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00

Tarpaulins 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00

Total 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00

Financial Schedules
Schedule 1 (Depreciation Table)

Equipment Cost Salvage Value Quantity Useful Life Annual Depreciation


Selling and Administration

Building ₱517,468.00 0 1 20yrs ₱25,873.40

PC with Monitor ₱14,290.00 ₱2,000.00 4 5yrs 9,832.00

Air Conditioner ₱8,000.00 0 2 15yrs 1,067.00

Car ₱100,000.00 0 1 5yrs 20,000.00


Total ₱56,772.00
Service Operations
Vendo Machine ₱10,068.00 0 20 7yrs ₱28,765.71

80

Routers ₱8,100.00 0 305 15yrs 164,700.00

Server Computer ₱33,723.00 ₱5,000.00 1 5yrs 5,744.00

Total ₱199,209.71

Schedule 2- Accounts Receivable

Accounts Receivable
Year Client Sales Accounts Receivable, end Allowance for doubtful accounts Accounts Receivable, end

2020 2,764,800.00 230,400.00 23,040.00 207,360.00

2021 2,847,744.00 237,312.00 23,731.20 213,580.80

2022 2,930,688.00 244,224.00 24,422.40 219,801.60

2023 3,022,848.00 251,904.00 25,190.40 226,713.60

2024 3,105,792.00 258,816.00 25,881.60 232,934.40

Schedule 3- Total Tax Payable


VAT Payable VAT Output Vat Input VAT Payable
2020 1,273,907.14 569,758.71 176,037.11
2021 1,331,677.93 633,752.88 174,481.26
2022 1,389,448.71 667,040.30 180,602.10
2023 1,448,206.93 700,486.94 186,930.00
2024 1,505,977.71 734,102.18 192,968.88

81

Total Tax Payable Vat Payable Income Tax Payable Total tax payable
2020 176,037.11 1,190,302.95 1,366,340.06
2021 174,481.26 1,235,878.41 1,410,359.68
2022 180,602.10 1,412,271.98 1,592,874.09
2023 186,930.00 1,590,343.02 1,777,273.02
2024 192,968.88 1,765,177.91 1,958,146.80

Vat Input
2020 2021 2022 2023 2024
Electricity 29,351.68 31,112.78 32,979.55 34,958.32 37,055.82
Internet Fee 514,285.71 575,670.86 606,198.86 636,726.86 667,254.86
Direct Materials 8,571.43 8,571.43 8,571.43 8,571.43 8,571.43
Maintenance 10,714.29 11,357.14 12,038.57 12,760.89 13,526.54
Utilities Expense 6,056.25 6,237.94 6,425.08 6,617.83 6,816.36
Office Supplies
Expense 779.36 802.74 826.82 851.62 877.17
Total 569,758.71 633,752.88 667,040.30 700,486.94 734,102.18

Schedule 4-Employee Benefits Contribution Payable


2020 2021 2022 2023 2024
SSS premium Payable 4,834.80 4,834.80 4,834.80 4,834.80 4,834.80
Philhealth Payable 1,010.63 1,010.63 1,010.63 1,010.63 1,010.63
Pag-ibig Payable 735.00 735.00 735.00 735.00 735.00

82

Schedule 5- Direct
Materials Used
Year Annual Users Reciept per roll Price per roll Materials Used
2020 1,825,000.00 429.00 15.00 63,811.19
2021 1,916,250.00 429.00 15.00 67,001.75
2022 2,007,500.00 429.00 15.00 70,192.31
2023 2,098,750.00 429.00 15.00 73,382.87
2024 2,190,000.00 429.00 15.00 76,573.43

Netbox Co.
Profit Distribution Schedule
For the years ended 31 December 2020-
2024
Profit Distribution
2020 Clavero Durangparang Fuerzas Tingson Uy Total
10% Interest on Beginning Capital 93,384 93,384 93384 93384 93384 466,920
Salary 240000 240,000
Bonus 127,737.35 127,737
Remainder divided equally 388,543.24 388,543.24 388543.239 388543.239 388543.239 1,942,716.19
Total 481,927.24 481,927.24 849,664.59 481,927.24 481,927.24 2,777,373.55
2021 Clavero Durangparang Fuerzas Tingson Uy Total
10% Interest on Beginning Capital 93,384.00 93,384.00 93,384.00 93,384.00 93,384.00 466,920
Salary 240000 240,000

83

Bonus 138,371.63 138,372


Remainder divided equally 407,684.93 407,684.93 407684.934 407684.934 407684.934 2,038,424.67
Total 501,068.93 501,068.93 879,440.56 501,068.93 501,068.93 2,883,716.30
2022 Clavero Durangparang Fuerzas Tingson Uy Total
10% Interest on Beginning Capital 93,384.00 93,384.00 93,384.00 93,384.00 93,384.00 466,920
Salary 240000 240,000
Bonus 179,530.13 179,530
Remainder divided equally 481,770.23 481,770.23 481770.2326 481770.2326 481770.2326 2,408,851.16
Total 575,154.23 575,154.23 994,684.36 575,154.23 575,154.23 3,295,301.29
2023 Clavero Durangparang Fuerzas Tingson Uy Total
10% Interest on Beginning Capital 93,384.00 93,384.00 93,384.00 93,384.00 93,384.00 466,920
Salary 240000 240,000
Bonus 221,080.04 221,080
Remainder divided equally 556,560.07 556,560.07 556560.07 556560.07 556560.07 2,782,800.35
Total 649,944.07 649,944.07 1,111,024.11 649,944.07 649,944.07 3,710,800.39
2024 Clavero Durangparang Fuerzas Tingson Uy Total
10% Interest on Beginning Capital 93,384.00 93,384.00 93,384.00 93,384.00 93,384.00 466,920
Salary 240000 240,000
Bonus 261,874.85 261,875
Remainder divided equally 629,990.72 629,990.72 629990.7239 629990.7239 629990.7239 3,149,953.62
Total 723,374.72 723,374.72 1,225,249.57 723,374.72 723,374.72 4,118,748.47

84

Financial Ratios

Horizontal Analysis

Year 0 2020 Increase(Decrease) Percentage


Current Assets
Cash 300,000.00 1,835,427.10 1,535,427.10 512%
Trade and other Receivables - 207,360.00 207,360.00
Prepaid Expenses 83,424.00 - (83,424.00) -100%
Materials Inventory - 14,454.30 14,454.30
Total Current Assets 383,424.00 2,057,241.40 1,673,817.40 437%
Non-Current Assets
Property, Plant and Equipment 3,565,776.00 3,314,879.09 (250,896.91) -7%
Intangible Asset 500,000.00 450,000.00 (50,000.00) -10%
Other Non-Current Assets 220,000.00 220,000.00 - 0%
Total Non-current assets 4,285,776.00 3,984,879.09 (300,896.91) -7%
TOTAL ASSETS 4,669,200.00 6,042,120.49 1,372,920.49 29%
Current Liabilities
Trade and other payables - 1,372,920.49 1,372,920.49
Total Current Liabilities - 1,372,920.49 1,372,920.49
Partner's Equity
Clavero, Capital 933,840.00 933,840.00 - 0%
Durangparang, Capital 933,840.00 933,840.00 - 0%
Fuerzas, Capital 933,840.00 933,840.00 - 0%
Tingson, Capital 933,840.00 933,840.00 - 0%
Uy, Capital 933,840.00 933,840.00 - 0%
Total Partner's Equity 4,669,200.00 4,669,200.00 - 0%
TOTAL LIABILITIES AND EQUITY 4,669,200.00 6,042,120.49 1,372,920.49 29%

85

2020 2021 Increase(Decrease) Percentage


Current Assets
Cash 1,835,427.10 2,162,517.25 327,090.15 18%
Trade and other Receivables 207,360.00 213,580.80 6,220.80 3%
Prepaid Expenses - - -
Materials Inventory 14,454.30 26,059.88 11,605.58 80%
Total Current Assets 2,057,241.40 2,402,157.93 344,916.53 17%
Non-Current Assets -
Property, Plant and Equipment 3,314,879.09 3,063,982.18 (250,896.91) -8%
Intangible Asset 450,000.00 400,000.00 (50,000.00) -11%
Other Non-Current Assets 220,000.00 220,000.00 - 0%
Total Non-current assets 3,984,879.09 3,683,982.18 (300,896.91) -8%
TOTAL ASSETS 6,042,120.49 6,086,140.11 44,019.62 1%
Current Liabilities -
Trade and other payables 1,372,920.49 1,416,940.11 44,019.62 3%
Total Current Liabilities 1,372,920.49 1,416,940.11 44,019.62 3%
Partner's Equity -
Clavero, Capital 933,840.00 933,840.00 - 0%
Durangparang, Capital 933,840.00 933,840.00 - 0%
Fuerzas, Capital 933,840.00 933,840.00 - 0%
Tingson, Capital 933,840.00 933,840.00 - 0%
Uy, Capital 933,840.00 933,840.00 - 0%
Total Partner's Equity 4,669,200.00 4,669,200.00 - 0%
TOTAL LIABILITIES AND EQUITY 6,042,120.49 6,086,140.11 44,019.62 1%

86

2021 2022 Increase(Decrease) Percentage


Current Assets
Cash 2,162,517.25 2,630,950.90 468,433.65 22%
Trade and other Receivables 213,580.80 219,801.60 6,220.80 3%
Prepaid Expenses - - -
Materials Inventory 26,059.88 34,816.75 8,756.87 34%
Total Current Assets 2,402,157.93 2,885,569.25 483,411.32 20%
Non-Current Assets -
Property, Plant and Equipment 3,063,982.18 2,813,085.27 (250,896.91) -8%
Intangible Asset 400,000.00 350,000.00 (50,000.00) -13%
Other Non-Current Assets 220,000.00 220,000.00 - 0%
Total Non-current assets 3,683,982.18 3,383,085.27 (300,896.91) -8%
TOTAL ASSETS 6,086,140.11 6,268,654.52 182,514.41 3%
Current Liabilities -
Trade and other payables 1,416,940.11 1,599,454.52 182,514.41 13%
Total Current Liabilities 1,416,940.11 1,599,454.52 182,514.41 13%
Partner's Equity -
Clavero, Capital 933,840.00 933,840.00 - 0%
Durangparang, Capital 933,840.00 933,840.00 - 0%
Fuerzas, Capital 933,840.00 933,840.00 - 0%
Tingson, Capital 933,840.00 933,840.00 - 0%
Uy, Capital 933,840.00 933,840.00 - 0%
Total Partner's Equity 4,669,200.00 4,669,200.00 - 0%
TOTAL LIABILITIES AND EQUITY 6,086,140.11 6,268,654.52 182,514.41 3%

87

2022 2023 Increase(Decrease) Percentage


Current Assets
Cash 2,630,950.90 3,103,426.59 472,475.69 18%
Trade and other Receivables 219,801.60 226,713.60 6,912.00 3%
Prepaid Expenses - - -
Materials Inventory 34,816.75 40,724.90 5,908.15 17%
Total Current Assets 2,885,569.25 3,370,865.09 485,295.84 17%
Non-Current Assets -
Property, Plant and Equipment 2,813,085.27 2,562,188.36 (250,896.91) -9%
Intangible Asset 350,000.00 300,000.00 (50,000.00) -14%
Other Non-Current Assets 220,000.00 220,000.00 - 0%
Total Non-current assets 3,383,085.27 3,082,188.36 (300,896.91) -9%
TOTAL ASSETS 6,268,654.52 6,453,053.45 184,398.93 3%
Current Liabilities -
Trade and other payables 1,599,454.52 1,783,853.45 184,398.93 12%
Total Current Liabilities 1,599,454.52 1,783,853.45 184,398.93 12%
Partner's Equity -
Clavero, Capital 933,840.00 933,840.00 - 0%
Durangparang, Capital 933,840.00 933,840.00 - 0%
Fuerzas, Capital 933,840.00 933,840.00 - 0%
Tingson, Capital 933,840.00 933,840.00 - 0%
Uy, Capital 933,840.00 933,840.00 - 0%
Total Partner's Equity 4,669,200.00 4,669,200.00 - 0%
TOTAL LIABILITIES AND EQUITY 6,268,654.52 6,453,053.45 184,398.93 3%

88

2023 2024 Increase(Decrease) Percentage


Current Assets
Cash 3,103,426.59 3,575,917.04 472,490.45 15%
Trade and other Receivables 226,713.60 232,934.40 6,220.80 3%
Prepaid Expenses - - -
Materials Inventory 40,724.90 43,784.34 3,059.44 8%
Total Current Assets 3,370,865.09 3,852,635.78 481,770.69 14%
Non-Current Assets -
Property, Plant and Equipment 2,562,188.36 2,311,291.45 (250,896.91) -10%
Intangible Asset 300,000.00 250,000.00 (50,000.00) -17%
Other Non-Current Assets 220,000.00 220,000.00 - 0%
Total Non-current assets 3,082,188.36 2,781,291.45 (300,896.91) -10%
TOTAL ASSETS 6,453,053.45 6,633,927.23 180,873.78 3%
Current Liabilities -
Trade and other payables 1,783,853.45 1,964,727.23 180,873.78 10%
Total Current Liabilities 1,783,853.45 1,964,727.23 180,873.78 10%
Partner's Equity -
Clavero, Capital 933,840.00 933,840.00 - 0%
Durangparang, Capital 933,840.00 933,840.00 - 0%
Fuerzas, Capital 933,840.00 933,840.00 - 0%
Tingson, Capital 933,840.00 933,840.00 - 0%
Uy, Capital 933,840.00 933,840.00 - 0%
Total Partner's Equity 4,669,200.00 4,669,200.00 - 0%
TOTAL LIABILITIES AND EQUITY 6,453,053.45 6,633,927.23 180,873.78 3%

89

Vertical Analysis

2020 2021 2022 2023 2024


Amount % Amount % Amount % Amount % Amount %

Sales 10,615,892.86 100.00% 11,300,999.11 100.00% 12,189,788.39 100.00% 13,086,806.25 100.00% 13,975,595.54 100.00%

Cost of Service 5,469,714.64 51.52% 6,022,439.19 53.29% 6,320,320.87 51.85% 6,620,640.52 50.59% 6,923,544.43 49.54%

Gross Profit 5,146,178.22 48.48% 5,278,559.91 46.71% 5,869,467.52 48.15% 6,466,165.73 49.41% 7,052,051.11 50.46%

Less: Expenses - - - - -

Pre-operating expenses 115,500.00 1.09% - 0.00% - 0.00% - 0.00% - 0.00%

Operating Expenses - - - - -
General and
Administration
Expenses

Bad Debts 23,040.00 0.22% 691.20 0.01% 691.20 0.01% 768.00 0.01% 691.20 0.00%

Permits and Licenses 5,000.00 0.05% 5,000.00 0.04% 5,000.00 0.04% 5,000.00 0.04% 5,000.00 0.04%

Salaries and Wages 923,000.00 8.69% 923,000.00 8.17% 923,000.00 7.57% 923,000.00 7.05% 923,000.00 6.60%

Depreciation expense 52,753.87 0.50% 52,753.87 0.47% 52,753.87 0.43% 52,753.87 0.40% 52,753.87 0.38%

90

Office Supplies expense 7,274.00 0.07% 7,492.22 0.07% 7,716.99 0.06% 7,948.50 0.06% 8,186.95 0.06%

Utilities Expense 50,468.75 0.48% 51,982.81 0.46% 53,542.30 0.44% 55,148.57 0.42% 56,803.02 0.41%

SSS Premium Expense 58,017.60 0.55% 58,017.60 0.51% 58,017.60 0.48% 58,017.60 0.44% 58,017.60 0.42%
Philhealth Premium
Expense 12,127.50 0.11% 12,127.50 0.11% 12,127.50 0.10% 12,127.50 0.09% 12,127.50 0.09%
PAG-IBIG Premium
Expense 8,820.00 0.08% 8,820.00 0.08% 8,820.00 0.07% 8,820.00 0.07% 8,820.00 0.06%

Insurance Expense 18,000.00 0.17% 19,080.00 0.17% 20,224.80 0.17% 21,438.29 0.16% 22,724.59 0.16%
Total General and
Administration
Expenses 1,158,501.72 10.91% 0.00% 0.00% 0.00% 0.00%
Selling expenses

Advertising Expense 20,000.00 0.19% 20,000.00 0.18% 20,000.00 0.16% 20,000.00 0.15% 20,000.00 0.14%

Total Selling expense 20,000.00 0.19% 20,000 0.18% 20,000.00 0.16% 20,000.00 0.15% 20,000.00 0.14%

Total Expenses 1,178,501.72 11.10% 1,158,965.20 10.26% 1,161,894.25 9.53% 1,165,022.32 8.90% 1,168,124.73 8.36%

Net Profit before tax 3,967,676.50 37.37% 4,119,594.71 36.45% 4,707,573.27 38.62% 5,301,143.41 40.51% 5,883,926.38 42.10%

Tax 1,190,302.95 11.21% 1,235,878.41 10.94% 1,412,271.98 11.59% 1,590,343.02 12.15% 1,765,177.91 12.63%

Net Profit after tax 2,777,373.55 26.16% 2,883,716.30 25.52% 3,295,301.29 27.03% 3,710,800.39 28.36% 4,118,748.47 29.47%

91

Current Assets
2020 2021 2022 2023 2024

Amount % Amount % Amount % Amount % Amount %


Cash
1,835,427 30.38% 2,162,517 35.53% 2,630,951 41.97% 3,103,427 48.09% 3,575,917 53.90%
Trade and other Receivables
207,360 3.43% 213,581 3.51% 219,802 3.51% 226,714 3.51% 232,934 3.51%
Prepaid Expenses
- 0.00% - 0.00% - 0.00% - 0.00% - 0.00%
Materials Inventory
14,454 0.24% 26,060 0.43% 34,817 0.56% 40,725 0.63% 43,784 0.66%
Total Current Assets
2,057,241 34.05% 2,402,158 39.47% 2,885,569 46.03% 3,370,865 52.24% 3,852,636 58.07%
Non-Current Assets
Property, Plant and Equipment
3,314,879 54.86% 3,063,982 50.34% 2,813,085 44.88% 2,562,188 39.71% 2,311,291 117.64%
Intangible Asset
400,000 6.62% 350,000 5.75% 300,000 4.79% 250,000 3.87% 250,000 3.77%
Other Non-Current Assets
220,000 3.64% 220,000 3.61% 220,000 3.51% 220,000 3.41% 220,000 3.32%
Total Non-current assets
3,984,879 65.95% 3,683,982 60.53% 3,383,085 53.97% 3,082,188 47.76% 2,781,291 41.93%
TOTAL ASSETS
6,042,120 100.00% 6,086,140 100.00% 6,268,655 100.00% 6,453,053 100.00% 6,633,927 100.00%
Current Liabilities

Trade and other payables


1,372,920.49 22.72% 1,416,940.11 23.28% 1,599,454.52 25.52% 1,783,853.45 27.64% 1,964,727.23 29.62%

92

Total Current Liabilities


1,372,920.49 22.72% 1,416,940.11 23.28% 1,599,454.52 25.52% 1,783,853.45 27.64% 1,964,727.23 29.62%
Partner's Equity

Clavero, Capital
933,840.00 15.46% 933,840.00 15.34% 933,840.00 14.90% 933,840.00 14.47% 933,840.00 14.08%
Durangparang, Capital
933,840.00 15.46% 933,840.00 15.34% 933,840.00 14.90% 933,840.00 14.47% 933,840.00 14.08%
Fuerzas, Capital
933,840.00 15.46% 933,840.00 15.34% 933,840.00 14.90% 933,840.00 14.47% 933,840.00 14.08%
Tingson, Capital
933,840.00 15.46% 933,840.00 15.34% 933,840.00 14.90% 933,840.00 14.47% 933,840.00 14.08%
Uy, Capital
933,840.00 15.46% 933,840.00 15.34% 933,840.00 14.90% 933,840.00 14.47% 933,840.00 14.08%
Total Partner's Equity
4,669,200.00 77.28% 4,669,200.00 76.72% 4,669,200.00 74.48% 4,669,200.00 72.36% 4,669,200.00 70.38%
TOTAL LIABILITIES AND EQUITY
6,042,120 100.00% 6,086,140 100.00% 6,268,655 100.00% 6,453,053 100.00% 6,633,927 100.00%

Profitability Ratios
2020 2021 2022 2023 2024
Return on Sales Profit after tax 2,777,373.55 2,883,716.30 3,295,301.29 3,710,800.39 4,118,748.47
Net Sales 10,615,892.86 11,300,999.11 12,189,788.39 13,086,806.25 13,975,595.54
ROS= 26% 26% 27% 28% 29%

Return on Investment Profit after tax 2,777,373.55 2,883,716.30 3,295,301.29 3,710,800.39 4,118,748.47
Original
Investment 4,669,200 4,669,200 4,669,200 4,669,200 4,669,200

93

ROI= 59% 62% 71% 79% 88%

Working Capital
Turnover Net Sales 10,615,892.86 11,300,999.11 12,189,788.39 13,086,806.25 13,975,595.54
Average
working capital 533,872 834,769 1,135,666 1,436,563 1,737,460
WCTO= 19.88 13.54 10.73 9.11 8.04

Asset Turnover Net Sales 10,615,892.86 11,300,999.11 12,189,788.39 13,086,806.25 13,975,595.54


Avg. Total
Asset 5355660.244 6064130.296 6177397.311 6360853.983 6543490.339
ATO= 1.98 1.86 1.97 2.06 2.14
2057241.40 2402157.93 2885569.25 3370865.09 3852635.78
Current Ratio Current Assets
Current 1372920.49 1416940.11 1599454.52 1783853.45 1964727.23
Liability
1.50 1.70 1.80 1.89 1.96
Current Ratio=

2,057,241 2,402,158 2,885,569 3,370,865 3,852,636


Net working Capital Current Asset
1,372,920 1,416,940 1,599,455 1,783,853 1,964,727
(Current Liablity)
Net working 684,321 985,218 1,286,115 1,587,012 1,887,909
Capital=
2,057,241 2,402,158 2,885,569 3,370,865 3,852,636

Quick Assets Ratio Quick Assets 2,042,787 2,376,098 2,850,753 3,330,140 3,808,851

94

Current
Liabilities 1,372,920 1,416,940 1,599,455 1,783,853 1,964,727
1.49 1.68 1.78 1.87 1.94

Leverage Ratio
Equity-Assets Ratio Net Equity 4,669,200 4,669,200 4,669,200 4,669,200 4,669,200
Total Assets 4,669,200 6,042,120 6,086,140 6,268,655 6,453,053
Equity-Assets
Ratio= 1.00 0.77 0.77 0.74 0.72

Projected Evaluation Techniques

Payback Period

Year Net Cash Inflows Cash to Date Investment Payback Period

1 3,078,270.46 3,078,270.46 4,669,200.00 1.00

2 3,184,613.21 6,262,883.67 0.50

3 3,596,198.20 6,780,811.41

4 4,011,697.30 7,607,895.50

5 4,419,645.38 8,431,342.67
In years 1.50

95

Payback Reciprocal 1 1

1.50
Payback Period

0.67

Net Present Value PVCI at 15%


PV of Cash
Year Net Cash Inflows PVF Inflows

1 3,078,270.46 0.8696 2,676,863.99

2 3,184,613.21 0.7561 2,407,886.05

3 3,596,198.20 0.6576 2,364,859.94

4 4,011,697.30 0.5718 2,293,888.52

5 4,419,645.38 0.4972 2,197,447.68

Total 11,940,946.17
Less: Cosf of Investment 4,669,200

Net Present Value 7,271,746.17

96

Present Value of Cash


Inflow 11,940,946.17
Profitability Index

Cost of Investment 4,669,200.00

=2.56

INTERNAL RATE OF RETURN 66.0957980%


Year Net Cash Inflows

1 3,078,270.46 0.602062191 1,853,310.26

2 3,184,613.21 0.362478881 1,154,355.03

3 3,596,198.20 0.218234829 784,815.70

4 4,011,697.30 0.131390939 527,100.68

5 4,419,645.38 0.079105517 349,618.33

PV of Cash Inflows 4,669,200.00

Less: Cosf of Investment 4,669,200.00

Net Present Value 0.00

97

98

Chapter V
Socio- Economic Study

Internet connections have beneficial implications to our economy, businesses and

consumers. As the social and economic lives of users become increasingly digital, reliable and

rapid access to the wealth of content has become essential. Nowadays, internet is an engine in

changing of economic growth and innovation. It enables the flexible labor markets improve

life balances of many individuals. Although there are legitimate reasons for setting the certain

boundaries, it finds a way to provide and strengthens new opportunities for many individuals

in order to achieve the potential goal of the proposed business. By the use of the internet, it is

drastically increasing and speeds up the globalization process by reducing physical barriers.

The economy grows to be more competitive and progressive in the corporate world due to the

complexity of needs of each individual for making the transaction more efficient, faster and

possible to complete and deliver services as well as to the transfer of payments and also for the

potential users can have a valuable tool of information in using internet in order to make lives

simpler and faster in a convenient way.

Employment Contributions

Netbox can provide jobs to individuals by the means of hiring employees who are
capable for the respective positions with skills and expertise that can enable to meet the goals
and objectives of the company where every worker to be employed will receive an above
minimum wages rate and be given benefits as well.

99

Government Contributions

Total Tax Vat Payable Income Tax Payable Total tax payable
Payable
2020
176,037.11 1,190,302.95 1,366,340.06
2021
174,481.26 1,235,878.41 1,410,359.68
2022
180,602.10 1,412,271.98 1,592,874.09
2023
186,930.00 1,590,343.02 1,777,273.02
2024
192,968.88 1,765,177.91 1,958,146.80
Table 5.1.0 Tax Payable

The benefits that both local & national government may derive from the proposed
project is the amount of tax that will be generated and it is a great opportunity of deploying
public Wi-Fi in an affordable cost to the entire city wherein the government can effectively
empower the communities with better services.

Business Permit 5,000

Table 1.1 Business permit Annual payment

Other Socioeconomic Concerns

Even those who can’t afford an internet at home, can be benefit from the connection to
access public services for looking a job and personal entertainment.

It can be also affects the communities like residents and travelers can enjoy a better travel
experience about transports for a better plan of their routes

100

Appendices and Attachment

A. Markets Study

a) Survey Questioner

Internet Users

Name (Optional): _______________________

Direction: Kindly encircle the letter/s that corresponds to your answer. If you have other
opinion, please specify. If you have multiple answers in some question, please do write.

1. Do you access the internet?

A. Yes

B. No

2. If yes, what Gadget do you use for internet?

A. Smartphone

B. Tablet/IPad

C. Laptop/Netbook

Others (Specify):____________

3. What mode of connection do you use?

A. Paid Data

B. Free Data

C. Wi-Fi

Others (Specify):____________

4. Are you interested in a Public Wi-Fi covering the city of Pagadian?

A. Yes

B. No

101

5. If yes, what amount are you willing to pay to be able to connect to this Wi-Fi on a daily
basis.

A. ₱5 B. ₱10 C. ₱15 D. ₱20 Others (Specify): _____

6. How often in a week will you connect to this public Wi-Fi?

A. 2 B. 4 C. Everyday Others (Specify):_______

7. What aspect would you like to experience in this Public Wi-Fi? (Check the boxes)

 High Speed
 Easy Connection
 Accessibility
 Affordability

102

Business Client

Business Name (Optional): ___________________Type of Business: __________________

Direction: Kindly encircle the letter/s that corresponds to your answer. If you have other
opinion, please specify. If you have multiple answer in some question, please do write.

1. Are you currently advertising your product or service?

A. Yes

B. No

2. If Yes, what mode of advertisement are you currently using?

A. Newspaper C. Flyers

B. Radio Stations D. Online

Others (Specify): ___________________

3. How much are you currently spending monthly on these paid advertisements?

A. ₱0-500

B. ₱500-1000

C. ₱1000-1500

D. ₱1500-2000

Others (Specify): ____________________

4. If a Social advertising service will be available such as Netbox, will you be willing to
advertise your product or service on this platform?

A. Yes

B. No

103

5. If yes, which of the following options will you be interested in? (Check the boxes):

Network Advertisements:

 Option A: 600 PHP per week for 6 pop-ups a day between 7:00 AM to 5:00 PM
 Option B: 600 PHP per week for 8 pop-ups a day between 5:00 PM to 7:00 AM
 Option C: 300 PHP per week for 3 pop-ups a day between 7:00 AM to 5:00 PM
 Option D: 300 PHP per week for 4 pop-ups a day between 5:00 PM to 7:00 AM
 Option E: 800 PHP per week for 10 pop-ups a day

Platform Advertisements

 Option F: 700 per week full front cover


 Option G: 500 per week shared space cover

Site Advertisement

 Option H: 800 per week

104

b) Tally Score

Business Clients Internet Users


Number Letter/ Result Percentage Number Letter/Choices Result Percentage
Choices 1
1 A 258 96%
A 148 59% B 10 4%
B 101 41% Total 268 100%
Total 249 100% 2
2 A 196 67%
A 13 6% B 30 10%
B 64 30% C 66 23%
C 51 24% Total 292 100%
D 87 40% 3
215 100% A 81 25%
3 B 116 94%
A 11 8% C 123 38%
B 60 42% Total 320 158%
C 36 25% 4
D 36 25% A 240 90%
Total 143 100% B 28 10%
4 Total 268 100%
A 185 77% 5
B 55 23% A 124 52%
Total 240 100% B 59 25%
5 C 27 11%
A 34 16% D 28 12%
Total 238 100%
B 28 13%
C 50 23% 6
A 52 22%
D 24 11%
B 40 17%
E 16 7%
C 149 62%
F 18 8%
Total 241 100%
G 24 11%
7
H 22 10%
A 214 44%
Total 216 100%
B 95 20%
C 94 20%
D 79 16%
Total 482 100%

105

c) Forecasting Tools

STATISTICAL PARABOLIC

YEAR Y X X^2 X^4 XY X^2*Y a bx cX^2 Yc Y-Yc (Y-Yc)^2


2013 3165 -4 16 256 -12660 50640 3987.63 -922 21.1429 3086.77 78.2286 6119.71
2014 3457 -2 4 16 -6914 13828 3987.63 -461 5.28571 3531.91 -74.914 5612.15
2015 3743 0 0 0 0 0 3987.63 0 0 3987.63 -244.63 59843.1
2016 4855 2 4 16 9710 19420 3987.63 461 5.28571 4453.91 401.086 160870
2017 4771 4 16 256 19084 76336 3987.63 922 21.1429 4930.77 -159.77 25526.9
Total 19991 0 40 544 9220 160224 Total 257972
SD 227.144

Projected Values of business

Year a + bX + cX^2 = Yc Number of Businesses Advertising Business advertising on Radio and News Papers
2018 3987.629 + 1383 + 47.5714 = 5418.2 x59.44% 3220.58 x20.54% 661.365
2019 3987.629 + 1844 + 84.5714 = 5916.2 x59.44% 3516.59 x20.54% 722.153
2020 3987.629 + 2305 + 132.143 = 6424.77 x59.44% 3818.88 x20.54% 784.231
2021 3987.629 + 2766 + 190.286 = 6943.91 x59.44% 4127.46 x20.54% 847.599
2022 3987.629 + 3227 + 259 = 7473.63 x59.44% 4442.32 x20.54% 912.258

Projected Values of Users

Year Population Age Segment Users of Internet


2018 77169.39 x59.8% 46147.3 X96.27% 44426
2019 78242.05 x59.8% 46788.7 X96.27% 45043.5
2020 79329.61 x59.8% 47439.1 X96.27% 45669.6
2021 80432.29 x59.8% 48098.5 X96.27% 46304.4
2022 81550.3 x59.8% 48767.1 X96.27% 46948.1

106

B. Technical Study

a) Memorandum of Agreement

107

108

b) Contracts

Advertising Contract

Terms of Agreement

• The advertisements are to be in image or video.


• The advertisements are to be shown 3 times a day on different areas depending
on the schedule.
• A weekly rate is to be charge for 300 PHP, payable monthly.

Client Information

Name:
___________________________________________________________________________

Address:
___________________________________________________________________________

Contact No.: _____________________Email Address: _____________________________

Note:

The entity hereby agrees on the terms of agreement.

_____________________________
Signature

109

110

C. Management Study
a)
b) Business Registration Form

111

112

113

114

D. Letters

Good Day Sir/Madam:

The 4th year students of Saint Columban College are currently doing their market study
of their feasibility studies.

This is to certify that the following students:

1. Carl Joseph C. Fuerzas

2. Cyden R. Clavero

3. Arman R. Tingson

4. Nico Durangparang

5. Roan O. Uy

Are bonafide students of Saint Columban College and are currently conducting a
feasibility study on Netbox Networks, a Social advertising and Cloud-based services.
Under the guidance of their instructors and advisers.

Wilfredo P. Mondido, CPA

Adviser

Mr. Wilbert Lopez, CPA

Instructor

115