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    25.9 Working Capital Requirement: This Project Cost May Be Financed at A Debt Equity Ratio of 3:1 As Follows

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    k.g.thri moorthy
    The document outlines the financing, working capital requirements, operating expenses, and profitability estimates for a 5-year project. It states that the project cost of Rs. 199.87 lakhs may be financed with a debt to equity ratio of 3:1, with equity of Rs. 49.97 lakhs and debt of Rs. 149.90 lakhs. The annual operating expenses are estimated to be Rs. 177.02 lakhs at 80% capacity utilization, and profitability is projected over 5 years with production capacity increasing from 80% in year 1 to 100% in years 3-5.

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    25.9 Working Capital Requirement: This Project Cost May Be Financed at A Debt Equity Ratio of 3:1 As Follows

    Uploaded by

    k.g.thri moorthy
    24 views1 page
    The document outlines the financing, working capital requirements, operating expenses, and profitability estimates for a 5-year project. It states that the project cost of Rs. 199.87 lakhs may be financed with a debt to equity ratio of 3:1, with equity of Rs. 49.97 lakhs and debt of Rs. 149.90 lakhs. The annual operating expenses are estimated to be Rs. 177.02 lakhs at 80% capacity utilization, and profitability is projected over 5 years with production capacity increasing from 80% in year 1 to 100% in years 3-5.

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    The document outlines the financing, working capital requirements, operating expenses, and profitability estimates for a 5-year project. It states that the project cost of Rs. 199.87 lakhs may be financed with a debt to equity ratio of 3:1, with equity of Rs. 49.97 lakhs and debt of Rs. 149.90 lakhs. The annual operating expenses are estimated to be Rs. 177.02 lakhs at 80% capacity utilization, and profitability is projected over 5 years with production capacity increasing from 80% in year 1 to 100% in years 3-5.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    24 views1 page

    25.9 Working Capital Requirement: This Project Cost May Be Financed at A Debt Equity Ratio of 3:1 As Follows

    Uploaded by

    k.g.thri moorthy
    The document outlines the financing, working capital requirements, operating expenses, and profitability estimates for a 5-year project. It states that the project cost of Rs. 199.87 lakhs may be financed with a debt to equity ratio of 3:1, with equity of Rs. 49.97 lakhs and debt of Rs. 149.90 lakhs. The annual operating expenses are estimated to be Rs. 177.02 lakhs at 80% capacity utilization, and profitability is projected over 5 years with production capacity increasing from 80% in year 1 to 100% in years 3-5.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    This project cost may be financed at a debt equity ratio of 3:1 as follows.

    Means of Finance Rs in lakhs


    Equity 49.97
    Debt 149.90
    Total 199.87
    25.9 Working Capital Requirement
    The working capital requirement is given below:
    SI No Particulars Years of Operation
    1 2 3 4 5
    1 Net Working Capital 76.00 85.50 95.00 95.00 95.00
    2 Available Bank Finance 57.00 64.12 71.25 71.25 71.25
    3 Margin Money 19.00 21.37 23.75 23.75 23.75

    25.10 Operating Expenses


    The annual operating expenses estimated at Rs 177.02 lakhs (80% capacity utilization) is given below:
    SI No Particulars Rs in Lakhs
    1 Annual Land Charges 0.12
    2 Raw materials 107.73
    3 Utilities 11.13
    4 Wages & Salaries 9.00
    5 Overheads 3.53
    6 Selling expenses 0.67
    7 Packing expenses 8.06
    8 Interest. on term loan 22.49
    9 Interest on Bank Finance for Working Capital 8.55
    10 Depreciation 5.74
    Total 177.02

    25.11 Profitability Estimates


    Si No Particulars Year
    -i Yr-2 Yr -3 Yr -4 Yr-5
    Production/Sales
    Installed Capacity(in lakh 1680 1680 1680 1680 1680
    nos)
    Capacity Utilization 80% 90% 100% 100% 100%
    Estimated Production (in lakh 1344 1512 1680 1680 1680
    nos)
    Gross Sales Revenue 323 363 403 403 403
    Expenses
    Raw Material Consumption 108 121 135 135 135
    Utilities 11 11 11 11 11
    Administrative Overheads 4 4 ____ 4 4 4

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