I need

-COST ESTIMATION AND CASH FLOW PROJECTIONS

- Break even Analysis

Something like the pictures below:

CASE STUDY - Emergency Power Project Case Study Objectives Upon completion of this case study report, you should be able to: 1. apply engineering economic decision-making process, 2. prepare a detailed financial analysis report, and 3. provide a professional recommendation on the finding of the study. Current Business Report Emergency Power Sdn. Bhd. (EPSB) supplies back-up power to commercial sector, when the commercial companies, municipals and private functions require back up power for their activities. The company is equipped with 300 kW generator which is connected to a trailer which enable the diesel generator to be moved to the locations where it is required The company has been on the business for the last two years. The diesel is manned by two electricians and one driver. Monthly, the company received request for power back-up for about 20 days with each service range between 8 to 12 hours. On the average, the total of 6,000 kWh provides to clients monthly. The investment cost for the trailer and accessories is RM600,000. The investment cost is sourced from bank loan to be recovered within 3 years with interest rate of 10% per annum. The demand for the back-up power has been on an increase. It is estimated that the direct cost from diesel 50 % of the revenues. The annual revenues for the company are shown in TABLE 1, where FY2018/2019 are actual values while FY2020 is a projection. TABLE 1: Emergency Power Supply Original Business Revenues (annual statement of income) FY2018 FY2019 FY2020 (Present) 780,000 780,000 820,000 Revenue (RM) Power sales Direct Cost (RM) Diesel Gross Profit (RM) Gross Margin (%) 390,000 390,000 50 390,000 390,000 50 410,000 410,000 50 As expected, salary and rental would form a significant portion of the operating expenditure. Utilities, transportation, equipment repair and general maintenance also form part of the costs. Other forms of commitment including tax, legal fee etc. is lumped into miscellaneous expenses. All budgeted expenses are tabulated in TABLE 2. For simplicity in analyzing the business profitability, the expenses are calculated based on the budgeted value rather than the actual costs. TABLE 2: EPSB Original Expenses (monthly estimations) Cost Item Shop Rental Utilities & Transportation Repair & Maintenance IT Services Descriptions RM2000 per month for 3 years and will increase by 10 % in 2021. 2% of total revenue RM500 per month for 3 years and will increase by 10 % in 2021 RM300 per month for 3 years and will increase by 10 % in 2021 RM100 per day for 22 per month for 3 persons in 2018 and increase by 5 % every year onward RM200 per day for 22 per month for 1 person in 2018 and increase by 5% every year onward RM800 Staff Salary Owner Salary Miscellaneous (tax, legal etc.) Business Expansion Plan EPSB plans to expand the company business. The plan is to procure another set of diesel generator and a trailer. The estimated investment required is RM650,000. The investment cost as bank loan to be recovered within 3 years with interest rate of 10% per annum. Here, EPSB needs to know how good business is (effective rate of return) how much the business is worth (if the company MARR is 15%). The projected annual revenues and operation costs are shown in TABLE 3. TABLE 3: Projected EPSB New Business Revenues (annual statement of income) FY2021 FY2022 FY2023 (Present) Revenue (RM) Power sales 1,170,000 1,236,000 1,300,000 Direct Cost (RM) Diesel 585,000 618,000 650,000 Gross Profit (RM) 585,000 618,000 650,000 Gross Margin (%) 50 50 50 As before, salary and rental would form a significant portion of the operating expenditure. Utilities, transportation, equipment repair, general maintenance and miscellaneous expenses are tabulated in TABLE 4. TABLE 4: Estimated Monthly EPSB New Business Expenses Cost Item Descriptions Shop Rental RM2200 per month for 3 years. Utilities & 3% of total revenue Transportation Repair & RM550 per month for 3 years Maintenance IT Services RM330 per month for 3 years Staff Salary RM100 per day for 22 per month for 6 persons in 2021 and increase by 5 % every year onward Owner Salary RM200 per day for 22 per month for 1 person in 2021 and increase by 5 % every year onward Miscellaneous RM1000 (tax, legal etc.) The company needs to prepare the sensitivity analysis in fluctuation of direct cost following margin fluctuation from 50% to 70%. Preparation of Business Expansion Brief The company needs your assistance in preparing a business brief to highlight the health of the business and the merit to expand business venture. For the case study provided, you are expected to study and prepare a project brief that must include (but not limited to the following steps of economic analysis: 1. Summary of project design requirement and constraints. 2. List and discuss project completion alternatives and cost impact. 3. State assumptions and project constraints. 4. Tabulate all costs and benefits expected. 5. Report on comparative analysis of potential options available 6. Identify critical factors that can influence decision through sensitivity analysis 7. Provide recommendation of the most attractive options and indicate potential areas of concern. END OF PAPER NPVJRR, Payback period Interest 20.0000% Year 0 Cummulative PW -100,000 -81,075 227553.06(Payback period) 1 Cash Flow - RM100,000.00 22,710.00 RM 444,424.40 RM 667,734.00 RM 694,632.20 RM 2 3 4 Present Value -RM100,000.00 RM 18,925.00 RM308,628.06 RM386,420.14 RM334,988.52 RM948,961.72 RM948,961.72 187.42005% RM 1,048,961.72 RM100,000.00 10.48962 Net Present Value(NPV) Internal Rate of Return(IRR) Total Cash Inflow Total Cash Outflow Profitability Index New Business Revenue Expenses NEW Business Revenues Revenue 2021 2022 2023 Catering 1,000,000.00 1,100,000.00 1,210,000.00 Bakery 500,000.00 550,000.00 610,000.00 Total Revenue(RM) 1,500,000.00 1,650,000.00 1,820,000.00 Direct Cost 2021 2022 2023 Catering 330,000.00 360,000.00 385,000.00 Bakery 180,000.00 200,000.00 220,000.00 Total Direct Cost(RM) 510,000.00 560,000.00 605,000.00 Gross Margin 990,000.00 1,090,000.00 1,215,000.00 Gross Margin % 66 66 67 Original Expenses (Annual Estimations) Shop Rental 36,000.00 36,000.00 36,000.00 Utilities&Transportation 45,000.00 49,500.00 54,600.00 Repair&Maintainence 6,000.00 6,000.00 6,000.00 IT Services 6,000.00 6,000.00 6,000.00 Staff Salary 87, 120.00 91,476.00 96,049.80 Owner Salary 79,200.00 83,160.00 87,318.00 Miscellaneous 1,000.00 1,000.00 1,000.00 Total annual expenses(RM) 260,320.00 273,136.00 286,967.80 Loan Payment(RM) 77,600.00 77,600.00 77,600.00 Total annual cost(RM) 847,920.00 910,736.00 969,567.80 Net Profit 652,080.00 739,264.00 850,432.20 Cash Flow New Business Cash Flow Diagram 1200000.00 969567.00 1000000.00 910736.00 847920.00 800000.00 600000.00 Amount (RM) 400000.00 200000.00 0.00 FY 2020 FY 2021 FY 2022 FY 2023 (200000.00) (200000.00) (400000.00) NPV, IRR and Payback period Cumulative PW (200000.00) 504606.03(Payback period) Year 0 1 2 3 NPV IRR Total cash inflow Total cash outflow Profitability index Cash Flow Present Value (RM) (200000.00) (200000.00) 845527.24 704606.03 908343.24 630793.92 967175.04 559707.78 2048954.48 335% 1553966.35 200000 7.77 (200000 is equivalent to -200000) Based on the original business, the total annual costs increases as the third year of the business approaches. However, it can be seen that the profit also increase from RM22710 to RM667734. In this way all expenses are covered and this shows that this is a good business start-up. The net present value is equalled to RM948961.72 while the IRR is 187.42%. The payback period begins in year 2. The payback period for the original business is for 2 years. Based on the new business plan estimates, it shows that the total annual cost ranges from RM847920.0 to RM969567.80. With this being said the net profit from the year 2021 to the year 2023 ranges from RM652080 to RM850432. Therefore in the year 2023 the profit gained is lesser than the expenses. The net present value of this is RM2048954.48 and the IRR is 335%. With this being said, the original business looks like a better business 4.0 BREAKEVEN ANALYSIS The breakeven analysis is done to determine the number of units the business needs to sell in order to avoid losses. The breakeven analysis in this case is divided into the original business and new business. Original Business Original Business Breakeven Analysis 1600000 1400000 1200000 1000000 800000 600000 400000 200000 0 -200000 0 1 2 3 -Total Cost Total Revenue Net Profit New Business New Business Breakeven Analysis 2000000 1500000 1000000 500000 0 1 2 3 -500000 Total Cost -Total Revenue Net Profit