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PROJECTED FINANCIALS & FEASIBILITY

The projected finanancials and feasibility of our project is given below in the form of financial statements.
The total investment required is 91100000 in Pakistani currency. The capital structure of this required
investment is given below. 40% equity will be provided by the two partners who own this facility while the rest
of 60% funds will be acquired from a reputable bank in the form of loan at an interest rate of 15%.

CAPITAL STRUCTURE

Equity (40%)
Debt (60%)

36,440,000.0
54,660,000.0

Further in our financial statements the expenses will be having and annual increase of 5% while the income
and revenues are projected to have an annual increase of 10%. The rest of the financial projections and
feasibility of the project has been made clear through the help of the constructed financial statements which
are given below.

____________________________________________________________________
University of Central Punjab

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OPERATING EXPENSES
Year 1

Year 2

Year 3

Year 4

Year 5

Administrative Salaries
legal fees
Entertainment
Telephone, Fax and Postage
Electricity +Generator
Advertisement
Repair of equip
Traveling conveyance
Printing and stationery

3,100,000
50,000
240,000
60,000
3,000,000
1,000,000
50,000
20,000
15,000

3,255,000
52,500
252,000
63,000
3,150,000
1,050,000
52,500
21,000
15,750

3,417,750
55,125
264,600
66,150
3,307,500
1,102,500
55,125
22,050
16,538

3,588,638
57,881
277,830
69,458
3,472,875
1,157,625
57,881
23,153
17,364

3,768,069
60,775
291,722
72,930
3,646,519
1,215,506
60,775
24,310
18,233

Total Operating Expenses

7,535,000

7,911,750

8,307,338

8,722,704

9,158,840

Total Operating Expenses

10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
Year 1

Year 2

Year 3

Year 4

Year 5

____________________________________________________________________
University of Central Punjab

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REVENUES
Monthly Membership
Year

Registration

Reg Revenue

Monthly

Members

Avg Monthly Rev

Yearly revenue

Year 1

4000

4,000,000

3000

1000

3,000,000

36,000,000

Year 2

4400

440,000

3000

1100

3,300,000

39,600,000

Year 3

4840

532,400

3000

1210

3,630,000

43,560,000

Year 4

5324

644,204

3000

1331

3,993,000

47,916,000

Year 5

5856

778,901

3000

1464

4,392,300

52,707,600

Permanent membership

Year

Package

50 % off

Members

Perm Revenue

Year 1

1,000,000

800,000

400

320,000,000

Year 2

1,000,000

800,000

440

352,000,000

Year 3

1,000,000

800,000

484

387,200,000

Year 4

1,000,000

800,000

532

425,920,000

Year 5

1,000,000

800,000

586

468,512,000

____________________________________________________________________
University of Central Punjab

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Caf Revenue

Year

Tobocco

Yearly

Dunkin Donuts

Yearly

Caf Revenue

Year 1

25000

300000

25000

300000

600,000

Year 2

27500

330000

27500

330000

660,000

Year 3

30250

363000

30250

363000

726,000

Year 4

33275

399300

33275

399300

798,600

Year 5

36602.5

439230

36602.5

439230

878,460

Rooftop Functions

Year

Functions

Revenue per Function

Total Revenue

Year 1

100

50,000

5,000,000

Year 2

110

55,000

5,500,000

Year 3

121

60,500

6,050,000

Year 4

133

66,550

6,655,000

Year 5

146

73,205

7,320,500

Day Care Revenue

Year

Per Child

Day care

Daycare revenue

Year 1

2,000

300

600,000

Year 2

2,000

330

660,000

Year 3

2,000

363

726,000

Year 4

2,000

399

798,600

Year 5

2,000

439

878,460

____________________________________________________________________
University of Central Punjab

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INCREMENTAL CASH FLOWS

Years

2010

2011

2012

2013

2014

2015

366,200,000
(7,535,000)
(1,325,000)
357,340,000
(8,128,515)
349,211,485
(122,224,020)
226,987,465
1,325,000

398,860,000
(7,911,750)
(1,325,000)
389,623,250
(8,128,515)
381,494,735
(133,523,157)
247,971,578
1,325,000

438,794,400
(8,307,338)
(1,325,000)
429,162,063
(8,128,515)
421,033,548
(147,361,742)
273,671,806
1,325,000

482,732,404
(8,722,704)
(1,325,000)
472,684,700
(8,128,515)
464,556,185
(162,594,665)
301,961,520
1,325,000

531,075,921
(9,158,840)
(1,325,000)
520,592,082
(8,128,515)
512,463,567
(179,362,248)
333,101,318
1,325,000

228,312,465

249,296,578

274,996,806

303,286,520

334,426,318

Initial Investment Outlay

Land
Building & Construction
Furniture & Equipment Cost
Net working capital
Legal Fees
Game Room

(62,000,000)
(25,000,000)
(1,500,000)
(2,000,000)
(500,000)
(100,000)

Total Initial Investment

(91,100,000)

Incremental Operating Cash Flows

Revenue
Operating expenses
Depreciation
Earning Before Interest &Taxes
Interest(15%)
Earning Before Taxes
Taxes(35%)
Net Income
Add Back Depreciation
Net Operating Cash Flows

Terminal Cash Flows

Net working capital

2,000,000

Total Terminal Cash Flow

2,000,000

Annual Cash Flows

(91,100,000)

228,312,465

249,296,578

274,996,806

303,286,520

____________________________________________________________________
University of Central Punjab

336,426,318

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Net Operating Cash Flows

400,000,000
350,000,000
300,000,000
250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
0
Year 1

Year 2

Year 3

Year 4

Year 5

Annual Cash Flows

400,000,000
350,000,000
300,000,000
250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
0
-50,000,000

2010

2011

2012

2013

2014

2015

-100,000,000
-150,000,000

____________________________________________________________________
University of Central Punjab

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PROJECT ECONOMICS
Net Present Value

NPV

638,740,731

Internal Rate of Return

IRR

135.00%

The Payback Period

PBP

0.46

Opportunity Cost

Discount Rate

15%

All the project economics indicate that in this scenario the project should be undertaken without any
hesitation as it shows a payback period of only 4 months which is quite exceptional and an IRR of 135% which
also indicates massive return on investment.

____________________________________________________________________
University of Central Punjab