Profitability statement

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Accounts officer
40 Points Joined December 2011

Dear Members,

I am writting this messeage to know the profitablity of newley started business, we are planing to start construction for 200000 Sq.Feet Building for rental purpose. we think 150000 sq.feet warm shell& 50000sq.feet for furnished office spaces. The Estimated project cost is Rs.40Crore.and we assume Rent per Sq.Fett for warm shell is Rs.30 \- & Rent for Furnished space is Rs.55\- per Month & we have to Collect 6 Months Rent as advance deposit.

Suppose we take 30Crore as bank Loan for Project expense and 10 Crore as share capital. If this Project is Profitable..?

Please give me reply....

Thanking you,

Sanoj

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On 15 December 2011 at 15:05 Report
Replies (2)
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Internal Auditor
334 Points Joined July 2011

Dear Sanoj

Pls give your bank loan interest rate and your current rate of return from your business

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On 15 December 2011 at 16:11
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Team Lead
7558 Points Joined November 2011

Your payback period for the project will be 0.46 years.  So after you reach the BEP  you shall start to earn profits after that.

The payback period is calculated as below:

 

Estimated project Cost

40000000

A
         

Rent for Warm Shell

-54000000

B

Rent for Furnished Space

-33000000

C
     

-87000000

B+C=D
     

-0.45977

A/D

 

As the payback period is less than a year, you are meeting the BEP very early.  So I think that the project would be profitable.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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On 15 December 2011 at 18:43

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