INITIAL INVESTMENT

Initial investments that we invest at the start of the business are

given below. At the start of business we invested about Rs.1950,000.
That includes all expense that is necessary for the beginners.

BEATLES MARRIAGE AGENCY

INITIAL INVESTMENT, 14-MAY-2009

Shop Security
Rs. 10, 00,000
Furniture & Fixture Rs. 1,
50,000
Installations & Equipment Rs.
50,000
(Electricity & Telecom)
Advertisement Expenses Rs. 5,
00,000
New Inventory Purchased Rs. 2,
50,000
(Tents, Lights, Chairs And

Decoration Accessories)

Total Rs.
19, 50,000
Working Capital
Following table will show the all necessary expenses beginning from
the start of business till now. This table also show that which
expense effect the most the capital investment. So by this data we
analyses yearly expenses and their effect in our business.

Expenses 2006 2007 2008 2009

1,80,000 1,98,000 2,16,000 2,34,000

Rent (15000/M) (16500/M) (18000/M) (19500/M)

Utility Bills 24,000 28,800 33,600 38,400

Mobile Expense 36,000 36,000 36,000 36,000

Transport Charges 30,000 37,500 45,000 45,000

Food, Tea, etc 60,000 75,000 90,000 90,000

Salary 78,000 1,20,000 1,38,000 1,56,000

Others 60,000 60,000 60,000 60,000

Total 4,68,000 5,53,000 6,18,600 6,59,400

SALES
As our business is the services providing agency (Marriage Agency).
Due to this reason our sale will be related to event as shown below.
Following table will show the money earn at the start of business till
the now. By this table we are able to find out sale trend.

EVENT NAME 2006 2007 2008 2009

Marriages (Mendhi) 10,00000 20,00000 25,00000 25,00000

Marriages (Barat) 20,00000 30,00000 35,00000 35,00000

Marriages(Waleema) 25,00000 35,00000 45,00000 45,00000

Birthday Party 2,00000 2,00000 2,50000 3,00000

Event Management 1,00000 1,50000 1,60000 1,80000

others 60,000 60,000 60,000 60,000

Total 58,60,000 89,10,000 109,70,000 110,40,000

PROFIT
Following table will show the profit earn again the sale. We estimate
that we will earn at about 20% profit. Following table will show the
exact fact and figure.

EVENTS SALE 2006 2007 2008 2009

Total Sale 58,60,000 89,10,000 109,70,000 110,40,000

Total Profit @ 20% 11,72,000 17,82,000 21,94,000 22,08,000

 CASH FLOW
Following table will show the scenario of cash flow.

END OF YEAR INVESTMENT 2006 2007 2008 2009

CASH FLOW 19,50,000 11,72,000 17,82,000 21,94,000 22,08,000

DEPRECIATION @ 10% 195000 195000 195000 195000

(MINUS)

BEFORE TAX CASH FLOW 977000 1587000 1999000 2013000

TAX @ 35% 341950 555450 699650 704550

(MINUS)

AFTER TAX CASH FLOW 635050 1031550 1299350 1308450

DEPRECIATION @ 10% 195000 195000 195000 195000

(ADDING)

NET CASH FLOW 830050 1226550 1494350 1503450

 Net Present Value (NPV)
 NPV is the present value of an investment project’s net cash
flows minus the project’s initial cash outflow.

 NPV=Total cash inflows –total cash outflows

 If NPV is +ve value the project is feasible

Year 2006 2007 2008 2009

NET CASH FLOW 830050 1226550 1494350 1503450

NPV 830050 1226550 1494350 1503450

(1+0.15) (1+0.15)2 (1+0.15)3 (1+0.15)4

Total 721782 927448 982559 859602

NPV=Total cash inflows total cash outflows

Total cash inflows = 721782 +927448 + 982559+ 859602 = 3491391
3491391– 19, 50,000 = 1541391 Project Accepted (NPV +)
Internal Rate of Return (IRR)

IRR is the discount rate that equates the present value of the future
net cash flows from an investment project with the project’s initial
cash outflow.

NET CASH FLOW 830050 1226550 1494350 1503450

IRR at 45% 572448 583377 490172 340108
IRR at 50% 553365 545133 442770 296978

If IRR is 45%
830050/ (1.45) + 1226550/(1.45) 2+ 1494350 /(1.45)3 + 1503450/(1.45) 4

= 572448 + 583377 + 490172 + 340108 = 1986177

If IRR is 50%
830050/(1.5) + 1226550/(1.5) 2+ 1494350 /(1.5)3 + 1503450/(1.5) 4

= 553365 +545133 + 442770 + 296978 = 1838246

Therefore
IRR > 45% & < 50%

Now finding the EXACT IRR by putting values in the formula

0.45 + (0.05)(36177)

(147931)

Answer .46.22%

Profitability Index

PI = cash Inflows/cash outflows

5053500 / 1950000

Answer.2.5
MODIFIED INTERNAL RATE OF RETURN (M.I.R.R)
PV=1950, 000
FV=5054, 400

FV=P (1+r) N
5054400=1950, 000(1+r) 4

ANSWER.26.88%

PAYBACK PERIOD

1950,000 830,050+126,550+ (1950000-956600)

1494,350

Payback period 2+0.66=2.66 years