profile on production of workers overall and gowns - SNNPR ...
profile on production of workers overall and gowns - SNNPR ...
profile on production of workers overall and gowns - SNNPR ...
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248-16The income statement <strong>and</strong> the other indicators <strong>of</strong> pr<strong>of</strong>itability show that the project isviable.2. Break-even AnalysisThe break-even point <strong>of</strong> the project including cost <strong>of</strong> finance when it starts to operate atfull capacity (year ) is estimated by using income statement projecti<strong>on</strong>.BE = Fixed Cost = 34 %Sales – Variable Cost3. Pay Back PeriodThe investment cost <strong>and</strong> income statement projecti<strong>on</strong> are used to project the pay-backperiod. The project’s initial investment will be fully recovered within 6 years.4. Internal Rate <strong>of</strong> Return <strong>and</strong> Net Present ValueBased <strong>on</strong> the cash flow statement, the calculated IRR <strong>of</strong> the project is 14 % <strong>and</strong> the netpresent value at 8.5 % discount rate is Birr 626,400.D. ECONOMIC BENEFITSThe project can create employment for 27 pers<strong>on</strong>s. In additi<strong>on</strong> to supply <strong>of</strong> the domesticneeds, the project will generate Birr 789,580 in terms <strong>of</strong> tax revenue. The establishment<strong>of</strong> such factory will have a foreign exchange saving effect to the country by substitutingthe current imports.
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