Summary and analysis Essay Example | Topics and Well Written Essays - 500 words

Summary and analytic thinking - Essay spokespersonThe quantitative information collected like the heel of events under the three categories of big, small and medium, event frequency, number of customers covered, selling prices and costs for different items, cost of equipment, various costs etc. is listed out and based on this, financial projections have been made to study the viability of the project. Projections have been made from January to December taking seasonal variations into account. terce products juice, smoothies and soup are assumed to be sold at specified prices. Depreciation of trailer and equipment has been shown as trailer cost and equipment cost.Almost the entire investment is assumed to be funded by a loan. of 30,000. dinero projections are made month-wise and the Present value of the cash flows has been calculated using a discount pasture of 4.4% and the total PV works out to 75653.53, much higher than the investment of 30287.64. However, the initial investm ent seems to have been calculated in counteractly by including various items of expenditure like electricity, petrol etc. and an additional amount of 500. The correct value of investment should be 22,450 including moreover the trailer cost 14,950 and the equipment cost 7,500. The NPV will be 75,636.53-14,950 = 60,686.53.The NPV analysis shows that the project is viable and it can be taken up. The profit projections will be realistic only(prenominal) if the assumptions made about the selling prices, costs and the volume of business are correct. Moreover, as pointed out earlier, the computation of the initial investment is incorrect and needs to be corrected. Moreover, the discount rate of 4.45 per month appears to be genuinely high, since this will be equivalent to an annual rate of more than 50%. However, these corrections will only have the effect of improving the NPV.Based on the analysis, the proposal is viable and