TABLE 1.

Total Project Cost

Fixed costs
Building
Equipment
Utensils
Furniture and fixture
Sub-total
Production cost
Direct materials
Direct labor
Management overhead
Administration and
marketing cost
Sub-total
total

Year 1

Year 2

Year 3

Year 4

Year 5

20,000
23,500
4,152
1,650

20,000
23,500
4,152
1,650

20,000
23,500
4,152
1,650

20,000
23,500
4,152
1,650

20,000
23,500
4,152
1,650

49,302

49,302

49,302

49,302

49,302

141,547
39,600
97,972
34,876

148,850
43,560
109,934
36,415

157,006
43,560
110,803
38,125

165,371
47,916
117,910
39,877

173,936
47,916
118,779
41,669

313,995

338,759

349,494

371,074

382,300

363

388,796

398,796

420,376

431,602

Table 2. Loan Schedule

Year
Beginning
1
2
3
4
5

Annual
payment

interest

principal

116,173
116,173
116,173
116,173
116,173

65,393
56,253
48,467
32,740
17,723

50,780
59,920
70,706
83,433
98,450

Annual payment =

Outstanding
balance
363,297
312,517
252,597
181,891
98,458

363,297
3.1272

= 116.173
C. Financial Statements
The project is estimated to sell 56,500 packs of delicious SP during the first
year at an initial price of 7.75/pack. Sales from waste products are also estimated to
amount to P1.795. Production is projected to increase by 1,500 packs per year and
selling price is assumed to increase by 10% annually. See table 3 for the projected
sales. The projected income statements are shown on table 4. The cash flow

statement of the projects for years 2015 to 2019 (ending December 31) are shown
in table 4.
Table 3. Projected Sales of Delicious SP
Year

Cost

Production

2015
2016
2017
2018
2019

363,297
388,061
398,796
420,376
431,602

56,500
58,000
59,500
61,000
62,500

Break-even
price
6.43
6.69
6.70
6.80
6.91

20% markup
7.72
8.03
8.04
8.27
8.29

Sales (P)
436,180
465,740
478,409
504,470
518,125

Computation of selling price of delicious SP

Break-even price =

cost
production x 20 markup

Table 4. Income statement

Sales
Delicious SP
Waste product
Not sales
Cost of sales
Raw materials
Direct labor
Factory overhead
Indirect labor
Indirect materials
Utilities
Repair and
maintenance
Taxes
Land rent
Depreciation
miscellaneous
Total
Gross total
Administrative cost
Office supplies
Promotion and
advertising
transportation
total
Profit from operation

Year 1

Years 2

Year 3

Year 4

Year 5

436,180
1,795
437,975

465,740
1,846
467,586

478,380
1,897
480,277

504,470
1,948
506,418

518,125
1,999
520,124

141,547
39,600

148,850
43,560

157,006
43,560

165,371
47,916

173,936
47,196

51,600
29,665
6,000

56,760
30,450
6,000
4,930

56,760
31,240
6,000
4,930

62,436
32,025
6,000
4,930

62,436
32,815
6,000
4,930

800
1,000
4,195
8,907
283,277
154,699

800
1,000
4,195
9,997
306,502
161,084

800
1,000
4,195
10,073
315,527
164,750

800
1,000
4,195
10,719
335,355
171,063

800
1,000
4,195
122,937
344,789
175,335

3,600
17,120

3,600
17,930

3,600
18,325

3,600
19,740

3,600
20,675

14,155
34,876
119,823

14,885
36,415
124,669

15,701
38,125
126,625

16,537
39,877
131,186

17,349
41,669
133,666

Less: interest on loan

Net profit

65,393
54,429

56,253
68,416

45,467
81,158

32,740
98,446

17,723
115,943

TABLE 5. Cash Flow Statement

Cash flow
Bank loan
Sales delicious
SP
Waste product
Cash balance
beginning
Total:
inflows
Cash outflows
Building
Equipment
Utensils
Furniture and
fixture
Raw materials
Direct labor
Mnfg.
Overhead
Administration
and operating
expenses
Loan
amortization
Total outflows
Cash balance ending

Year 1

Year 2

Year 3

Year 4

Year 5

363,297
463,180

465,740

478,380

504,470

518,125

1,795
-

1,846
321,802

1,897
334,456

1,948
349,066

1,999
368,237

801,272

789,388

814,733

855,484

888,361

20,000
23,500
4,152
1,630

141,547
39,600
97,972

148,850
43,560
109,934

157,006
43,560
110,803

165,371
47,916
117,910

173,936
47,916
118,799

34,876

36,415

38,125

39,877

41,669

116,173

116,173

116,173

116,173

116,173

479,470
321,802

454,932
334,456

465,667
349,066

487,247
360,237

498,473
389,888

TABLE 6. Balance Sheet

Current assets
Cash
Fixed assets
Building
Equipment
Utensils
Furniture and fixture
Total

Year 1

Year 2

Year 3

Year 4

Year 5

348,922

334,456

349,066

368,237

389,888

20,000
23,500
4,152
1,650
49,302

20,000
23,500
4,152
1,650
49,302

20,000
23,500
4,152
1,650
49,302

20,000
23,500
4,152
1,650
49,302

20,000
23,500
4,152
1,650
49,302

Less: accum. Deprn

Net fixed assets
Total assets
Liabilities and equity
Liability:
Bank loan
Equity retained
Earnings
Total liability and net
worth

4,158
45,144
394,066

8,316
40,896
375,442

12,474
36,828
385,894

16,632
32,670
400,907

312,517

252,597

181,891

98,438

54,429
366,946

122,845
375,442

204,003
385,894

302,449
400,907

20,790
28,512
418,400

418,400
418,400