The document presents a proposed fly ash brick project that would produce 4 million bricks per year and sell 2.4 million bricks at Rs. 7,000 per 1,000 bricks. The initial investment is Rs. 10 million with fixed costs of Rs. 3.66 million per year and variable production costs of Rs. 4.5 per brick. Break-even analysis shows the project needs to sell over 2.29 million bricks annually just to cover fixed and financing costs.
The document presents a proposed fly ash brick project that would produce 4 million bricks per year and sell 2.4 million bricks at Rs. 7,000 per 1,000 bricks. The initial investment is Rs. 10 million with fixed costs of Rs. 3.66 million per year and variable production costs of Rs. 4.5 per brick. Break-even analysis shows the project needs to sell over 2.29 million bricks annually just to cover fixed and financing costs.
The document presents a proposed fly ash brick project that would produce 4 million bricks per year and sell 2.4 million bricks at Rs. 7,000 per 1,000 bricks. The initial investment is Rs. 10 million with fixed costs of Rs. 3.66 million per year and variable production costs of Rs. 4.5 per brick. Break-even analysis shows the project needs to sell over 2.29 million bricks annually just to cover fixed and financing costs.
The document presents a proposed fly ash brick project that would produce 4 million bricks per year and sell 2.4 million bricks at Rs. 7,000 per 1,000 bricks. The initial investment is Rs. 10 million with fixed costs of Rs. 3.66 million per year and variable production costs of Rs. 4.5 per brick. Break-even analysis shows the project needs to sell over 2.29 million bricks annually just to cover fixed and financing costs.
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Fly Ash Brick Project
Proposed plant can produce (Capacity) = 4 million bricks/yr
Sales Volume = 2.4 million bricks/yr
Average price = 7000 /1000 bricks Initial Investment = 10 million From the initial investment(includes investment by partners from their = 6 million own resources) Bank provides loan = 12% ==> mortgage of the equipmen Sharma Salary = 50,000 Life of project = 5 years => mortgage of the equipment Analysis and Computation
Routine Expenses Per month Per Year Total of 5 years
Routine Expenses 95,000 1,140,000 5,700,000 Personal Expenses 210,000 2,520,000 12,600,000 Total 305,000 3,660,000 18,300,000 Financial Structure
Estimated Investment Cost (Rs)
Building Modification 1,400,000 Water Supply 100,000 Machinery 2,000,000 Trucks 3,000,000 Payload machine 1,500,000 Total 8,000,000
Net book value
Costs Per Year
Estimated Investment Cost (Rs) Yr 1 (Rs) Yr 2 (Rs) Yr 3 (Rs) Yr 4 (Rs) Building Modification 1,400,000 Water Supply 100,000 Machinery 2,000,000 Trucks 3,000,000 Payload machine 1,500,000 Total 8,000,000 6,400,000 4,800,000 3,200,000 1,600,000
Depreciation : 1600000
Financial Aid Financial Aid Cost (Rs) Investment from the parners (Equity) 6,000,000
Borrow from the Bank
(Loan rate : 12%/annum) 4,000,000
Total (Initial Investment) 10,000,000
Finance Costs Cost/month (Rs) Cost / Year (Rs)
Yr 1 Yr 2 Yr 3 Yr 4 Repayment 66,667 800,000 800,000 800,000 800,000 Interest Payable 40,000 480,000 480,000 480,000 480,000 Total 106,667 1,280,000 1,280,000 1,280,000 1,280,000 Total Liability 3,200,000 2,400,000 1,600,000 800,000 Yr 5 (Rs)
) Calculation of Interest Payable
Yr 5 Interest rate 800,000 1 year 480,000 Loan 1,280,000 # of years per year Interest Payable 0 per month Interest Payable
Calculation of Repayment Loan n of Interest Payable 12% 12 months 4000000 5 480000 40000
n of Repayment 4000000 (5 years) 800000 per year 66666.66667 per month Variable Cost
Production Cost (for Total for 5 years
200,000 bricks) Per month (Rs) Cost Per unit (Rs/UnPer Year (Rs/Unit)(Rs/Unit) Fly ash 250,000 1.25 3,000,000 15,000,000 Gypsum 250,000 1.25 3,000,000 15,000,000 Lime 300,000 1.50 3,600,000 18,000,000 Sand 40,000 0.20 480,000 2,400,000 Electricity 10,000 0.05 120,000 600,000 Labour 50,000 0.25 600,000 3,000,000 Total 900,000 4.50 10,800,000 54,000,000
Unit variable cost to produce one unit of brick = 4.5
Number of bricks 200000 200000 200000 200000 200000 200000 CVP Analysis Rs Total Fixed Expense 3660000 Finance Costs 480000 Depreciation 1600000 Selling price of bricks 7 Cost/unit 4.5
Units of brick to be sold per month
Total Fixed + Finance / 2296000 units per month Selling price - Cost/ unit
