Feasibility Assessment Template

Developed for:
Developed by:

Ag Marketing Resource Center

Phil Kenkel and Rodney Holcomb, Oklahoma State University

This templates is designed to assist you in assessing the feasibility of a project

Input cells are shaded in blue.
Each sheet is currently projected allowing you to only input information in the input cells.
The template can also be modified and expanded to meet your particular situation by turnin
If you choose to modify the template we would advise you to save it under another name a
To get started go to the "Input Page"

For comments or suggestions contact:

Phil Kenkel, kenkel@okstate.edu 405-744-9818'

a State University

of a project

tion in the input cells.

cular situation by turning off the projection.
under another name and retain the original for reference.

INPUT CAPITAL STRUCTURE AND

EXPENSE INFORMATION
Percent Financed
Long Term Interest Rate
Loan Term
Total Plant Property & Equip
Loan Amount
Working Capital
Short Term Interest Rate

60.00%
8%
10
$5,779,500
$3,467,700
$1,000,000
6%

Tax Information
Property Tax as % of Prop and Plant
Insurance/Total PPE
Income Tax Rate

0.50%
2.00%
50.00%

Payroll Information
% of Payroll Tax to Salaries
% of Retirement Tax to Salaries
% of Employee INS Tax to Salaries
Benefits as % of Salaries
Wage Inflation
Utilities
Electricity/month
Water/month
Gas/month
Telephone/month
Total Utilities
Other
Expense Inflation Rate
Maintenance as % of Plant & Equip
Insurance as % of Plant & Equip
Discount rate for NPV calculation

1%
15.00%
68.00%
30.00%
1.00%

$
$
$
$
$

10,000
250
500
200
10,950

1.00%
3%
2%
8%

INPUT PRODUCTS, INITIAL VOLUME, MARGIN PE

ANTICIPATED SALES GROWTH RATE
Product Name
Bread
Units
lbs
Initial Volume
3,225,000
Sales growth
1%
Price/unit
$
1.30
Product Name
Units
Initial Volume
Sales growth
Price/unit

B
lbs
0
0%
$

VARIABLE COST OF PRODUCTION PER UNIT

Product
Unit
Inputs
$/lb
Packaging
$/lb
Cost #3
$
Cost #4
$
Bread
lbs
Product
Cost #1
Cost #2
Cost #3
Cost #4
B

Unit
$
$
$
$
lbs

There are also inputs on the "Personnel Expense" and

NITIAL VOLUME, MARGIN PER UNIT AND

S GROWTH RATE
Product Name
Units
Initial Volume
Sales growth
Price/unit
Product Name
Units
Initial Volume
Sales growth
Price/unit

C
lbs
0
0%
$

D
lbs
0
0%
$

PRODUCTION PER UNIT

VC/unit
Product
$
0.16 Cost #1
$
0.12 Cost #2
$
Cost #3
$
Cost #4
$
0.28 C

Unit
$
$
$
$
lbs

VC/unit
$
$
$
$
$
-

VC/unit
$
$
$
$
$
-

Unit
$
$
$
$
lbs

VC/unit
$
$
$
$
$
-

Product
Cost #1
Cost #2
Cost #3
Cost #4
D

Personnel Expense" and "Depreciation" sheets

Depreciation

Return On Investment
Quality Percent
Discount Rate

0%
0.00%

This sheet summaries the volume and price and sales growth information from the input page. There is no input on th
Sales Projections
Bread
B
C
D

lbs
lbs
lbs
lbs

Year 1
3,225,000
0
0
0
3,225,000

Year 2
3,257,250
0
0
0
3,257,250

Year 3
3,289,823
0
0
0
3,289,823

Year 4
3,322,721
0
0
0
3,322,721

Year 5
3,355,948
0
0
0
3,355,948

Year 1

Year 2

Year 3

Year 4

Year 5

Gross Margin Projection

Bread
Total Volume
Margin/Unit
Gross Margin/Unit

3,225,000
$1.30
$4,192,500

3,257,250
$1.30
$4,234,425

3,289,823
$1.30
$4,276,769

3,322,721
$1.30
$4,319,537

3,355,948
$1.30
$4,362,732

B
Total Volume
Margin/Unit
Gross Margin/Unit

3,225,000
$0.000
$0

3,257,250
$0.000
$0

3,289,823
$0.000
$0

3,322,721
$0.000
$0

3,355,948
$0.000
$0

C
Total Volume
Margin/Unit
Gross Margin/Unit

0
$0.00
$0

0
$0.00
$0

0
$0.00
$0

0
$0.00
$0

0
$0.00
$0

D
Total Volume
Margin/Unit
Gross Margin/Unit

0
$0.00
$0

0
$0.00
$0

0
$0.00
$0

0
$0.00
$0

0
$0.00
$0

$4,192,500

$4,234,425

$4,276,769

$4,319,537

$4,362,732

933,685
933,685

$ 943,021
$
$
$
$ 943,021

TOTAL GROSS MARGINS

Production Expense
Bread
B
C
D
TOTAL VARIABLE EXP.

$
$
$
$
$

906,225
906,225

$
$
$
$
$

915,287
915,287

$
$
$
$
$

924,440
924,440

$
$
$
$
$

put page. There is no input on this page.

Year 6
3,389,507
0
0
0
3,389,507

Year 7
3,423,402
0
0
0
3,423,402

Year 8
3,457,637
0
0
0
3,457,637

Year 9
3,492,213
0
0
0
3,492,213

Year 10
3,527,135
0
0
0
3,527,135

Year 9

Year 10

Year 6

Year 7

Year 8

3,389,507
$1.30
$4,406,360

3,423,402
$1.30
$4,450,423

3,457,637
$1.30
$4,494,927

3,389,507
$0.000
$0

3,423,402
$0.000
$0

3,457,637
$0.000
$0

3,492,213
$0.000
$0

3,527,135
$0.000
$0

0
$0.00
$0

0
$0.00
$0

0
$0.00
$0

0
$0.00
$0

0
$0.00
$0

0
$0.00
$0

0
$0.00
$0

0
$0.00
$0

0
$0.00
$0

0
$0.00
$0

$4,406,360

$4,450,423

$4,494,927

$4,539,877 $4,585,276

$
$
$
$
$

$ 981,312
$
$
$
$ 981,312

$ 952,452
$
$
$
$ 952,452

$
$
$
$
$

961,976
961,976

971,596
971,596

3,492,213 3,527,135
$1.30
$1.30
$4,539,877 $4,585,276

$ 991,125
$
$
$
$ 991,125

This sheet calculates loan amortization and interest. There are no inputs on this sheet.
Total Investment
Long Term Interest Rate
Percent Financed
Loan Amount
Loan Term

$5,779,500
8.00%
60.00%
$3,467,700
10

Year 1
$3,467,700
8.00%
$277,416

Year 2
$3,228,326
8.00%
$258,266

Year 3
$2,969,803
8.00%
$237,584

Year 4
$2,690,598
8.00%
$215,248

Year 5
$2,389,056
8.00%
$191,124

Annual Payment
Principal

$516,790
$239,374

$516,790
$258,523

$516,790
$279,205

$516,790
$301,542

$516,790
$325,665

Ending Balance

$3,228,326

$2,969,803

$2,690,598

$2,389,056

$2,063,391

$318,266

$297,584

$275,248

$251,124

Beginning Balance
Interest Rate
Interest

Working Capital
Short Term Interest Rate
Interest Amount
Total Interest Expense

$1,000,000
6.00%
$60,000
$337,416

Year 6
$2,063,391
8.00%
$165,071

Year 7
$1,711,673
8.00%
$136,934

Year 8
$1,331,817
8.00%
$106,545

Year 9
$921,573
8.00%
$73,726

Year 10
$478,509
8.00%
$38,281

$516,790
$351,718

$516,790
$379,856

$516,790
$410,244

$516,790
$443,064

$516,790
$478,509

$1,711,673

$1,331,817

$921,573

$478,509

$0

$225,071

$196,934

$166,545

$133,726

$98,281

This sheet allows you to input salaries and overtime assumptions for various positions.
Benefit calculations are based on the percentage you entered on the "Input" sheet.
Occupation

# Employees

General/ Administration
General Manager
Administrative Assistant
Other
Transportation
Customer Service
Sales/Marketing
Operators
Bread Processing
Packaging
Sanitation
Plant Management

4
1
2
1
1
1
1
80
60
20
1
1

Total Personnel
Costs

Salary
$153,894
$100,000
$40,000
$13,894
$40,716
$55,882
$221,958
$2,638,876
$32,986
$32,986
$67,656
$30,782
$3,209,763

Total Salaries
$193,894
$100,000
$80,000
$13,894
$40,716
$55,882
$221,958
$2,638,876
$1,979,157
$659,719
$67,656
$30,782

Benefits
$58,168
$30,000
$24,000
$4,168
$12,215
$16,764
$66,587
$791,663
$593,747
$197,916
$20,297
$9,234
$1,824,760

Overtime%
5%

5%
5%
5%
5%

5%
5%

Overtime

Total

$ 11,730.50

$263,793

$ 100,993.65
$ 35,780.03
$ 14,480.70
$ 133,482.88

$153,924
$108,426
$303,026
$3,564,022

$
$

3,382.81
1,539.08

$91,336
$41,555

$301,390

$4,526,082

This Sheet summaries expenses. The only input is for "supplies and miscellaneous" expenses.

Salaries
Benefits
Overtime

Labor

Year 0
$3,209,763
$1,824,760
$301,390

Year 1
$3,241,861
$1,843,008
$304,404

Year 2
$3,274,279
$1,861,438
$307,448

Year 3
$3,307,022
$1,880,052
$310,522

Year 4
$3,340,092
$1,898,852
$313,627

Total Labor

$5,335,913

$5,389,272

$5,443,164

$5,497,596

$5,552,572

Production Expenses

$906,225

$915,287

$924,440

$933,685

Utilities

$131,400

$132,714

$132,714

$132,714

$6,426,897

$6,491,166

$6,554,750

$6,618,971

Total Variable
Fixed
Maintenance

170,385

$172,089

$173,810

$175,548

Insurance

113,590

$114,726

$115,873

$117,032

Property Tax

115,590

$116,746

$117,913

$119,092

Depreciation

$951,110

$693,545

$509,570

$378,211

Interest

$337,416

$318,266

$297,584

$275,248

$1,688,091

$1,415,371

$1,214,750

$1,065,131

Supplies

$0

$0

$0

Miscellaneous

$0

$0

$0

$0

$0

$0

$0

$8,114,987

$7,906,537

$7,769,500

$7,684,102

Total Fixed
Other

Total Other
Total Expenses

Year 5
$3,373,493
$1,917,841
$316,764

Year 6
$3,407,228
$1,937,019
$319,931

Year 7
$3,441,300
$1,956,390
$323,130

Year 8
$3,475,713
$1,975,954
$326,362

Year 9
$3,510,471
$1,995,713
$329,625

Year 10
$3,545,575
$2,015,670
$332,922

$5,608,098

$5,664,179

$5,720,820

$5,778,029

$5,835,809

$5,894,167

$943,021

$952,452

$961,976

$971,596

$981,312

$991,125

$132,714

$132,714

$132,714

$132,714

$132,714

$132,714

$6,683,833

$6,749,344

$6,815,511

$6,882,339

$6,949,835

$7,018,006

$177,303

$179,076

$180,867

$182,676

$184,503

$186,348

$118,202

$119,384

$120,578

$121,784

$123,002

$124,232

$120,283

$121,486

$122,701

$123,928

$125,167

$126,419

$378,579

$214,106

$50,000

$50,000

$50,000

$0

$251,124

$225,071

$196,934

$166,545

$133,726

$98,281

$1,045,493

$859,124

$671,080

$644,933

$616,397

$535,279

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$7,729,326

$7,608,468

$7,486,591

$7,527,272

$7,566,232

$7,553,285

0.00%
0.00%

This sheet summaries income, expenses and net profit. There are no inputs on this sheet
Gross Margins
Bread
B
C
D

Year 0
$0
$0
$0
$0

Year 1
$4,192,500
$0
$0
$0

Year 2
$4,234,425
$0
$0
$0

Year 3
$4,276,769
$0
$0
$0

Year 4
$4,319,537
$0
$0
$0

Year 5
$4,362,732
$0
$0
$0

Total

$0

$4,192,500

$4,234,425

$4,276,769

$4,319,537

$4,362,732

Expenses
Variable
Fixed
Other

$0
$0
$0

$6,426,897
$1,688,091
$0

$6,491,166
$1,415,371
$0

$6,554,750
$1,214,750
$0

$6,618,971
$1,065,131
$0

$6,683,833
$1,045,493
$0

Total Expenses

$0

$8,114,987

$7,906,537

$7,769,500

$7,684,102

$7,729,326

Before Tax Profit

$0

Tax
After Tax Profit

($3,922,487) ($3,672,112) ($3,492,731) ($3,364,565) ($3,366,594)

$ (1,961,244) $ (1,836,056) $ (1,746,365) $ (1,682,283) $ (1,683,297)

$0

($1,961,244) ($1,836,056) ($1,746,365) ($1,682,283) ($1,683,297)

Year 6
$4,406,360
$0
$0
$0

Year 7
$4,450,423
$0
$0
$0

Year 8
$4,494,927
$0
$0
$0

Year 9
$4,539,877
$0
$0
$0

Year 10
$4,585,276
$0
$0
$0

$4,406,360

$4,450,423

$4,494,927

$4,539,877

$4,585,276

$6,749,344
$859,124
$0

$6,815,511
$671,080
$0

$6,882,339
$644,933
$0

$6,949,835
$616,397
$0

$7,018,006
$535,279
$0

$7,608,468

$7,486,591

$7,527,272

$7,566,232

$7,553,285

($3,202,108) ($3,036,167) ($3,032,344) ($3,026,356) ($2,968,010)

$ (1,601,054) $ (1,518,084) $ (1,516,172) $ (1,513,178) $ (1,484,005)
($1,601,054) ($1,518,084) ($1,516,172) ($1,513,178) ($1,484,005)

This sheet calculates depreciation. You enter descriptions and values for buildings, equipment and other property.
Depreciation
Buildings
39 year Straight Line
Special Purpose Buildings 10 year Straight Line
Equipment and Heavy Rolling7Stock
Yr MACRS with half year convention
Light Trucks and Vehicles
5 Yr MACRS with half year convention

Buildings
#1
#2
#3
#4
#5
Total Buildings

Special Purpose Buildings

Description
Plant

Value
$ 2,000,000

$ 2,000,000

Equipment and Heavy Rolling Stock

Description
#1
Flour System
#2
Bread Line
#3
Bun Line
#4
Bread and Bun Pans
#5
Miscellaneous
Total Equip and Heavy Rolling Stock
Total Plant Property and Equipment
Land
Total Land, Plant Property and Equipment

#1
#2
#3
#4
#5
Total Special Purpose Building
Light Trucks and Vehicles

Value
$
200,000
$ 1,554,500
$ 1,460,000
$
100,000
$
365,000
$ 3,679,500

#1
#2
#3
#4
#5
Total Light Trucks and Vehicles

$ 5,679,500
$
100,000
$ 5,779,500

Annual Total Depreciation

Year
Buildings
Special Purpose Buildings
Equipment and Heavy Rolling Stock
Light Truck and Vehicles

1
$50,000
$0
$525,801
$0

2
3
$50,000 $50,000
$0
$0
$901,110 $643,545
$0
$0

4
$50,000
$0
$459,570
$0

Total Depreciation

$575,801

$951,110 $693,545

$509,570

Buildings
39 year Straight Line
Special Purpose Buildings 10 year with percentage from table
Equipment and Heavy Rolling7Stock
year with percentage from table
Light Trucks and Vehicles
5 year with percentage from table

Buildings
Cost
Life

$2,000,000
20

Salvage
Period
Depreciation per year for 39 years

$1,000,000
20
$50,000

Special Purpose Buildings

Cost
Life

$0
10

Year

Depreciation
1
2
3
4
5
6
7
8
9
10

Rate
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0

Equipment and Heavy Rolling Stock

Year
Depreciation
1
$525,801
2
$901,110
3
$643,545
4
$459,570
5
$328,579
6
$328,211
7
$328,579
8
$164,106
Light Trucks and Vehicles
Year

Depreciation
1
2
3
4
5
6

$0
$0
$0
$0
$0
$0

10%
14%
14%
14%
14%
14%
14%
14%
14%
14%

Rate
14.29%
24.49%
17.49%
12.49%
8.93%
8.92%
8.93%
4.46%

Rate
20.00%
32.00%
19.20%
11.52%
11.52%
5.76%

, equipment and other property.

l Purpose Buildings
Description

Value

Special Purpose Building

Trucks and Vehicles

Description

Value

Light Trucks and Vehicles

5
$50,000
$0
$328,211
$0

6
7
$50,000 $50,000
$0
$0
$328,579 $164,106

8
$50,000
$0

9
$50,000
$0

10
$50,000
$0

$378,211

$378,579 $214,106

$50,000

$50,000

$50,000

0.0613

This sheet summaries the feasibility of the project. It provides net present value, benefit cost ratio and internal rate of
The only input is the discount rate.
Discount Rate
Year
Gross Margin
Discount Factor
PV of Income

12.00%
0

$43,862,826

1
$0

1
$4,192,500
0.892857143
$3,743,304

2
$4,234,425
0.797193878
$3,375,658

3
$4,276,769
0.711780248
$3,044,120

Total Expense
Less Depreciation and Interest

$5,779,500

$8,114,987
$1,288,526

$8,114,987
$1,011,811

$7,906,537
$807,154

Cash Expenses
Discount Factor
PV of Expenses

$5,779,500
1
$5,779,500

$6,826,462
0.892857143
$6,095,055

$7,103,177
0.797193878
$5,662,609

$7,099,383
0.711780248
$5,053,201

($5,779,500)
($5,779,500)

($2,633,962)
($2,351,752)

($2,868,752)
($2,286,951)

($2,822,614)
($2,009,081)

$77,712,186

Benefits Less Costs

PV Benefits Less PV Costs
Total PV of Income
Total PV of Expenses
Net Present Value
Internal Rate of Return
PV Benefit/PV Cost Ratio

24558187.68
$46,127,879
($21,569,691)
#NUM!
0.53

st ratio and internal rate of return

4
$4,319,537
0.635518078
$2,745,144

5
$4,362,732
0.567426856
$2,475,531

6
$4,406,360
0.506631121
$2,232,399

7
$4,450,423
0.452349215
$2,013,145

8
$4,494,927
0.403883228
$1,815,426

9
10
$4,539,877 $4,585,276
0.360610025 0.32197324
$1,637,125 $1,476,336

$7,769,500
$653,459

$7,684,102
$629,704

$7,729,326
$439,177

$7,608,468
$246,934

$7,486,591
$216,545

$7,116,041
0.635518078
$4,522,373

$7,054,398
0.567426856
$4,002,855

$7,290,149
0.506631121
$3,693,416

$7,361,534
0.452349215
$3,329,984

$7,270,045
0.403883228
$2,936,249

$7,343,546 $7,467,952
0.360610025 0.32197324
$2,648,156 ##########

($2,796,504)
($1,777,229)

($2,691,666)
($1,527,323)

($2,883,789)
($1,461,017)

($2,911,111)
($1,316,839)

($2,775,118)
($1,120,824)

($2,803,669) ($2,882,676)
($1,011,031) ($928,145)

$7,527,272
$183,726

$7,566,232
$98,281