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 Descriptions RM2000 per month for 3 years and will increase by 10% in 2021. 2% of total revenue Utilities & Transportation Repair & Maintenance IT Services Staff Salary 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 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) FY2018 FY2019 FY2020 (Present) 1,170,000 1,236,000 1,300,000 Revenue (RM) Power sales Direct Cost (RM) Diesel Gross Profit (RM) Gross Margin (%) 585,000 585,000 50 618,000 618,000 50 650,000 650,000 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 Descriptions RM2000 per month for 3 years and will increase by 10% in 2021. 2% of total revenue Utilities & Transportation Repair & Maintenance IT Services Staff Salary 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 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) FY2018 FY2019 FY2020 (Present) 1,170,000 1,236,000 1,300,000 Revenue (RM) Power sales Direct Cost (RM) Diesel Gross Profit (RM) Gross Margin (%) 585,000 585,000 50 618,000 618,000 50 650,000 650,000 50
