Prepare the Feasibility Study for this project:

1. Pro forma Income Statement – With proper titles and sections
2. Pro Forma Balance Sheet
3. Notes and schedules should include ALL ASSUMPTIONS USED.
4. You will not be graded if the assumptions are not included and well structured

– Prepare a loan application to be submitted to the bank, please identify:

1. Amount of Loan requested?
2. Structure of the loan
   1. Grace Period
   2. Type of interest requested? Fixed Variable?
   3. Loan Repayment Schedule
3. To make it easier to obtain the loan:
   1. What Collateral will you offer?
   2. What pledges will you make to the bank?
4. What are your sources for repayment of the loan?

All schedules and work papers have to be submitted.

 

A group of investors are planning to build a 200 room hotel in Ramallah and the have the following data: a. Total area to b built 21,000 square meters b. They need at a minimum 5 Dunums in the middle of town: i. Each dunum costs 1,050,000 Jordanian Dinars i. Land registration is estimated at 5% of cost c. Engineering plans and permits i. Engineering cost is estimated at USD250,000/ i. Government and local permits are US$150,000/ d. Construction period is expected to take 4 years- e. All administrative and hiring will start 6 months before construction completion i. 20 Management and administrative employees at an average monthly salary of 10,000 Israeli Shekels ii. Workers needed as guards, cleaning, shops, restaurants, and room service are expected to be 80 employees with a salary of 3500 Israeli Shekels f. Construction cost is expected to be US$2,500/ square meter including the cost of meeting halls, Lobby, and all the other needed facilities 8. Furniture is expected to cost $35,000/ room and US$650,000 to furnish the lobby and meeting rooms h. Cash Balances needed to be maintained at a minimum of US$1,000,000 i. Leverage ratio can not exceed 2.5X j. Occupancy is expected to increase as follows: i. 1" year 40% ii. Each year occupancy will increase by 10% to max at 85%. iii. Each room will cost US$150/ per night iv. Each room spends an extra 65% of room cost in the restaurants, phones, and laundry v. Cost of living adjustment (Inflation @ 3% p.a.) k. Each group will have to assume their own general and administrative expenses. Whereas, General & Admin Expenses excluding salaries are limited to 35% of revenues. 1. Building is depreciated using straight line over 30 years m. Furniture is depreciated over 10 years using straight line n. Vat is at 17% charged to the customers and paid after 15 days from month end o. All expenses, other than salaries, are paid after 60 days from receiving invoice p. The hotel has an average of 15 days accounts receivable