2. Maximum capacity utilisation is done on single shift basis, for 300 days in a year. During the first and second years of operation, capacity utilisation is assumed to be 60 per cent and 80 per cent, respectively. The unit is expected to achieve full capacity utilisation third year onwards.
3. Salaries and wages, cost of raw materials, utilities, rent and so on are based on the prevailing rates in and around Thrissur. These cost factors may vary with time and location.
4. Interest on term loan and working capital has been taken @ 16% on an average. This rate may vary depending on the policy of different financial institutions/agencies from time to time.
5. Cost of machinery and equipment refer to a particular make/model. Prices are approximate.
6. Break-even point percentage indicated is of full-capacity utilisation.
7. Project preparation costs and the like, whenever required, can be considered under pre-operative expenses.
8. Essential machinery and equipment required for the project have been indicated. The unit may also utilise common facilities available at electronics test and development centres and electronic regional test laboratories set up by state governments and STQC Directorate of Department of Information Technology, Ministry of Communication and Information Technology, to manufacture products conforming to Bureau of Indian Standards.
Financial analysis
Table I shows the fixed capital, that is, land and building, and machinery and equipment. Table II shows the cost of working capital per month for three months.
Total capital investment is given in Table III, and cost of production per annum in Table IV. Turnover per annum is shown in Table V.
Profit per annum (before tax) = Turnover per annum – Cost of production per annum
= 10,800,000–9,299,076 = 1,500,924
