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Corp Fin Project Requirements-1

1. Rectify the market size calculation by projecting the current market size of 2000 units 5 years into the future using an industry growth rate of 5% per year. 2. Depreciate heavy equipment over 7 years and other equipment over 5 years using straight-line depreciation based on the capital expenditures. 3. Develop a human resources plan listing personnel positions and numbers, salaries that grow with inflation, and the number of people required to operate each piece of equipment across shifts to determine wages and salaries.

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Shabab Sartaj Rahman
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33 views

Corp Fin Project Requirements-1

1. Rectify the market size calculation by projecting the current market size of 2000 units 5 years into the future using an industry growth rate of 5% per year. 2. Depreciate heavy equipment over 7 years and other equipment over 5 years using straight-line depreciation based on the capital expenditures. 3. Develop a human resources plan listing personnel positions and numbers, salaries that grow with inflation, and the number of people required to operate each piece of equipment across shifts to determine wages and salaries.

Uploaded by

Shabab Sartaj Rahman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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S

l.
1.

What to do

How to do it

Rectify
market size
calculated in
first
submission.

2.

Computing
Depreciation

Grow the market size by taking


it five years into the future. If
todays market size 2000
units, and industrys growth
rate is 5%, then take it take it
five years ahead by (2000 X
(1.05)5)
It will come from CAPEX. For
heavy equipment, do a

straight line for 7 years, for


other type of equipment
depreciate for 5 years.
3.

Wages and
Salaries

4.

Raw
materials

5.

Utilities

By preparing a HR plan. List


different positions, the number
of people in each position, and
their salaries. Direct labor has
to be a function of capacity
utilization. It will also depend
on how many people I need to
operate each of my equipment
and how many shifts we shall
have per day. Grow all salaries
by the rate of inflation.
Find the ingredients needed to
make each unit and their
proportions. Multiply each of
these RM and their proportions
by the cost of RM and total
number of units produced.

Option 1:Get the electric bills


of a company in your industry
for 12 months and find how
many number of units they
produced each month and run
a regression. (most
preferred)
Option 2: Get the electric
bills, divide by their units
produced and multiply by the

What info Required


a. Growth of the industry

a. Which of the
equipment in our
CAPEX are heavy
equipment and which
are not heavy
equipment.
a. Different categories of
personnel.
b. Number of personnel
needed in each
category.
c. Salaries for each
category.
d. Number of people
needed to operate
each equipment.
a. What raw materials
are needed to produce
each unit of ceramic
table-ware.
b. What are their
proportions in each
unit?
c. The price of raw
materials.
a. What are the major
type of utilities we
need for our
production- electricity,
gas, water.
b. 12 months electric,
gas, and water bills for
a similar company.
c. Units produced by that
company per month

6.

Other costs

units that we will produce.


Option 3: Get the rated power
consumption of your
equipment, multiply it by
capacity utilization and some
industry average. (not sure
what it is)
Examples: Insurance,
Acquiring license for export,
company registration fees, etc.

for the last 12 months


OR,
a. Find power consumed
by each equipment.

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