EXERCISE OF PROJECT FINANCIAL APPRAISAL

THE HYDROLYZED PROTEIN FACTORY CONSTRUCTION PROJECT

1. Overview of the project
- Project name: Hydrolyzed protein factory
- Projects location: Tho Quang Seafood Service Industrial Zone, Son Tra district, Da Nang city
- Projects product: Hydrolyzed protein
- Investor: Seafood and foodstuff factory, Thuan Phuoc seafood and trading corporation
- Contact: 500 Ngo Quyen - Ngu Hanh Son district Da Nang City
- Capacity: 600 tons/year Projects life: 5 years Type of investment: New investment project.
- Objectives: Manufacture hydrolyzed protein from fish waste by using enzyme hydrolysis biotechnology.
2. General information about the projects finance
Capacity
Capacity

Unit price
Inputs

PARAMETERS OF THE PROJECTS CAPACITY

600 tons/year
Unit: Ton
2 015
2 016
2 017
2 018
Year
0
1
2
3
Capacity Investment
450
500
550
8 000 000 VND/ton

2 019
4
550

2 020
5
570

Unit: VND
Materials
Year
0
Materials Investment
Material consumption standard
Material price
Enzyme
Year
0
Enzyme Investment

1.6
Material units
750 000 VND/ton
1

2
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Consumption standard
Unit price

20%
7 500 000

Material unit
VND/ ton

Gas
Year
0
Gas Investment
Consumption standard
Personnels salary, insurance cost
(Average of 20 people)
Electricity, water
Package, transport
Year
Cost
Package and transports unit price
Outside manufacture cost
Initial investment capital
a. Building capital
a.1. Factory
a.2. Product warehouse
a.3. Internal roads
a.4. Grass, Trees
a.5. Laboratory
a.6. Office
Total building cost
Depreciation in 10 years, using
straight line method
b. Equipment
Production tools
Total equipment cost
Depreciation in 5 years, using
straight line method
c. Manufacturing equipment
c.1. Production line
c.2. Equipment for the laboratory

4
4

5
5

1 000 000 VND/ton

480 000 000 VND/year
250 000 000 VND/year
1
1

2
2

Investment
300 000 VND/ton
36 200 000 VND/ year
2015 (Year 0 of the project)
Amount
Unit price
Sum of money
2
(m )
(VND)
(VND)
720
1 500 000
300
1 500 000
1 512
250 000
520
100 000
25
1 800 000
150
1 800 000

130 000 000

130 000 000
Depreciation in 10 years, using straight line
method
1 000 000 000
400 000 000
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Unit: VND
3
3

Total manufacturing equipment

Total investment capital (a+b+c)
d. Other costs (year 0 of the
project)
d.1. Cost of investment report
d.2. Cost of project appraisal
d.3. Structure design and
construction estimates
d.4. Verify design documents
d.5. Prepare bidding documents for
construction and installation
d.6. Project management board cost
d.7. Cost of works insurance
d.8. Cost of balance-sheet
verification
d.9. Cost of handover
d.10. Prepare bidding documents for
equipment
Total other costs

0.5%*Total investment *1.4

0.04%*Debt
2.8%*Item a
0.17%*Item a
0.2%*Item a
1.34%* Total investment
capital
0.34%* Total investment
capital
0.2%* Total investment
capital
5 379 210 VND
0.135%*Item c

Total investment for the work (a+b+c+d)

VND

Approximate
Concessional debt
Income tax
Cost of equity

VND
3 000 000 000 VND
Interest rate 6.5%/year
Constant payment in 4 years (from the first year
22% Year
20% Year

Requirements:
1. Create the debt payment schedule; calculate Cost of debt and WACC
Create Depreciation schedule; Estimation revenue; Cost of production and the statement of income?
2. Create cash flow of the project (investors perspective)? Identify indicators of project financial appraisal?
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