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Financial Feasibility of Product A

The document provides a financial feasibility analysis for Product A of Hino Pak Pvt Limited from 2022 to 2028. It includes assumptions for factors like price increase, salary increase and inflation. It also provides the projected profit and loss statement, cash flows, cumulative cash flows, NPV and IRR. The analysis shows that the product will be financially viable with a positive NPV of $85 million and high IRR of 73%, with a payback period of 2 years and 1 month.

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Muhammad Asad
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274 views4 pages

Financial Feasibility of Product A

The document provides a financial feasibility analysis for Product A of Hino Pak Pvt Limited from 2022 to 2028. It includes assumptions for factors like price increase, salary increase and inflation. It also provides the projected profit and loss statement, cash flows, cumulative cash flows, NPV and IRR. The analysis shows that the product will be financially viable with a positive NPV of $85 million and high IRR of 73%, with a payback period of 2 years and 1 month.

Uploaded by

Muhammad Asad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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The Hino Pak Pvt Limited

Financial Feasibility of Product A

Particulars 2022 2023 2024 2025 2026


Assumptions
Price Increase 11% 13% 12% 11% 11%
Salary Increase 10% 12% 11% 10% 10%
Inflation 9% 11% 10% 9% 9%
Unit Sold 1,000 1,400 1,960 2,548 3,312
Growth 40% 40% 30% 30%
Price 15,900 17,967 20,123 22,337 24,794
Discount 2% 2% 2% 2% 2%
FOH % of DM and DL 10% 10% 10% 10% 10%
Number of Staff 3 3 3 3 3
Direct Material Per Unit 2,986 3,314 3,646 3,974 4,332
Direct Labour Per Unit 1,235 1,396 1,563 1,735 1,926
FOH Per Unit 422 471 521 571 626
Fixed Cost Per Month 150,000 166,500 183,150 199,634 217,601
Price of Fixed Assest 20,000,000
Depreciation 7 Years
Taxes 35% 35% 35% 35% 35%
Discount Rate (10 Year PIB) 11%
Risk Premium 2%
Risk Free Rate 13%

Profit and Loss Statement


Rs in Million

Revenue
Sales 16 25 39 57 82
Discount 0 (1) (1) (1) (2)
Net Sales 16 25 39 56 80

Expenses
Direct Material (3) (5) (7) (10) (14)
Direct Labour (1) (2) (3) (4) (6)
Factory Over Head (0) (1) (1) (1) (2)
Fixed Cost (2) (2) (2) (2) (3)
Total Expenses (6) (9) (13) (18) (25)

EBITDA 10 15 25 37 55

Interest 0 0 0 0 0
Depreciation (3) (3) (3) (3) (3)

Profit Before Tax 7 13 22 35 52


Taxes (2) (4) (8) (12) (18)
Profit After Tax 4 8 15 22 34

Financial Indicators Year 0 Year 1 Year 2 Year 3 Year 4


Cash Flows (20) 7 11 17 25
Cummulative Cash Flow (20) (13) (2) 16 41

NPV 85
IRR 73%
PayBack 2 Years and 1 Month
2027 2028

11% 11%
10% 10%
9% 9%
4,141 4,969
25% 20%
27,521 30,548
2% 2%
10% 10%
3 3
4,722 5,146
2,138 2,373
686 752
237,185 258,531

35% 35%

114 152
(2) (3)
112 149

(20) (26)
(9) (12)
(3) (4)
(3) (3)
(34) (44)

78 105

0 0
(3) (3)

75 102
(26) (36)
49 66

Year 5 Year 6 Year 7


37 51 69
78 129 198

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