feasibility studies - tsirt printing

7/29/2019 Feasibility Studies - Tsirt Printing

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Chapter I

INTRODUCTION

A. Brief History of the Project

Twenty first (21st) century is called the digital age because it is the era of

modern technologies that we are using in our everyday life. These advance and

sophiscated technologies help us to do our work easier and faster. One of the

advance technologies is the digital t-shirt printer. It is one of the newest machine

that was invented to satisfy our growing needs, wants and desires. Printed T-

shirts are in demand nowadays thats why the researchers chose to establish a

Digital T-Shirt Printing Business.

The proposed name of the business is WATTASHIRT. This name was

chosen because of its simplicity, uniqueness and sweetness sound that can be

easily distinguished by the market. The researchers want to attract customers not

only for its remarkable name, but significantly the quality and standard of every

printed shirts that it can produce. This establishment is located at the 2nd floor of

Mega Center the Mall,Gen. Tinio St., Cabanatuan City financed by Mr. Roberto

U. Cariazo Jr. This kind of business is a service type which needs to be

established in a place where it is well populated and should be easy to

locate.With that the researchers have chosen the right and the best location for

the said business.

WATTASHIRT targets the people of Cabanatuan most especially the

students in the nearby schools/universities.

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B. Statement of the Problem

The central problem of this study is the evaluation of the viability of

establishing WATTASHIRT, a digital t-shirt printing business here in

Cabanatuan City, Nueva Ecija.

C. Objectives

The main objective of this study is to determine the viability and feasibility of

the proposed venture.

Specifically, objectives from the point of view of the four functional areas ofmanagement are as follows.

1. Marketing

a. To identify the demand and supply for the products.

b. To formulate marketing strategies for a successful business operations.

2. Technical

a. To develop the processes involved in operationalizing the project in the

most effective and economical way.

b. To know the production requirement in the establishment of a digital

printing business.

3. Organization and Management

a. To design organizational set-up that is best suited for the proposed

project.

b. To determine the number and qualifications of the people required to

manage the project effectively.

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4. Financial

a. To identify the sources and mode of financing of the proposed business.

b. To make an estimate of the amount of initial investment required to

execute the project.

c. To present projected financial statement of the proposed venture for the

next five years.

d. To evaluate the profitabiliy, liquidity and stability of the proposed business

venture.

D. Significance of the Study

The significance of the study has a great impact to the community and

society as a whole, these are as follows: Firstly, to the potential customers they

will have a personalized t-shirt at a very affordable price. Secondly, to the printing

industry for it will improve the customers buying habit, and of course the

industrys merely stability as well.

To the university, this study will serve as a reference in the library.

To show to the aspiring businessman that this kind of business is

profitable.

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E. Scope and Limitations

This study covers the establishment of WATTASHIRT in Mega Center

the Mall, Gen. Tinio St.,Cabanatuan City. All necessary information are

gathered.

This study was done within a regular term of second semester of school

year 2009 -2010. Relevant datas were gathered during this period.

The survey covers those people in the mall. Generally, the target market

of this business are the end users. This market includes the students, and those

people who were t-shirt lovers. The limitations of the researchers in the study isthe actual distance of other possible customers outside the vicinity of Mega

Center the Mall, Gen. Tinio St., Cabanatuan City. This study is for academic

purposes only.

F. Methodology

1. Sources of Data

The Researcher used two classes of data, primary and secondary data.

a. Primary Data were obtained through survey questionnaires and

interviews. A sample survey questionnaire was formulated by researchers for the

target market. This was validated by the five experts and five laymen before

administration. Experts are those directly involved or have experience in running

a business venture with some advancement in technology. A copy of the

validation sheet and questionnaire are presented in Exhibit I-A and Exhibit I-B

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respectively. Three hundred ninety five (395) copies of survey questionnaires

were distributed, all of which were retrieved.

Interviews were conducted to those who have existing printing business. A

copy of a sample letter of request for an interview and structured interview guide

questions are presented in Exhibit I-C.

b. Secondary Data were gathered from printed materials, books,

magazines and related studies made on the subject. These materials were

generated from National Statistics Office (NSO), Bureau of Fire Protection(BFP),

Department of Trade and Industry(DTI) and some of the website in the internet.2. Research Design

To yield a meaningful and relevant information, the researcher used

exploratory and descriptive methods.

a. Exploratory Method. The researcher conducted survey and some

interviews to some well known establishments who also practice the same

business.

There were no printed studies regarding this type of business in Araullo

University library however, lots of sufficient information were obtained through

internet research and surveys. The result of interviews is presented in Exibit I-E.

b. Descriptive Method. Descriptive method was used to gather and

describe comprehensively the characteristics of the target markets elements.

The description is based on a sample size which represents the total population.

Survey questionaires were distributed randomly to the prospective clients to

study and determine the demand and supply rate.

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The formula in computing the sample size is:

= N where;

= sample size

1+N N = estimated population

= margin error

The target market is composed of eleven thousand one hundred fifty (11,

150) ages 10 20, Nine thousand nine hundred thirty five (9, 935) ages 21 30

and eight thousand seven hundred fifteen (8, 715) ages 31 55.Table I-A

Target Market Population2009

Ages 10 20 Ages 21 30 Ages 31 55 Total11, 150 9, 935 8, 715 29, 800

Source: Mega Center Mall management

The sample size of three hundred ninety five (395) is resultant of the following

computation.

= 29800

1+29800 (5%)

= 395

where;

= sample size

N= 29800 = 5%

The sample size was pro-rated accodding to the weight of each category

in population. One hundred fifty five (155) copies where distributed to ages 10

20, One hundred twenty eight (128) copies where distributed to ages 21 30,

One hundred twelve (112) copies where distributed to ages 31 55 respectively.

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3. Treatment of Data

All quantitative data gathered were processed using manual or personal

method. Comparative analysis was also used to analyzed data.

Historical information on variables involved in forecasting the figures in the

marketing aspect were inconsistently increasing. Hence, projections were

computed through the use of Statistical Straight-line Method. This method has a

formula that goes as follows:

Y = a + bx Where;

= Y - b

X = is the assigned value

B = XY- XY/n a = is the constant

X - ( X) b = is the parameter

N = number of years

Y = is the given data

To determine the earning desirability of the investment, the following formula

were used.

a. Net Present Value (NPV). A sophisticated capital budgeting technique;

found by subtracting the projects initial investments from the present value

of its cash inflow discounted at tha rate equal to the investors cost of

capital.

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Formula: Present Value of cash flow

Less: Cost of Investment

Net Present Value

b. Internal Rate of Return (IRR) is a technique used to determine the

discount rate which equates the present value of cash inflows with the

initial investment associated with the project. The rate is actually the

compound annual rate of return the investor will earn if it invest in the

project and receives the project cash inflows.

n

IRR = ___t____ =

t=1 (1 + IRR ) t t

Where;

= initial investment = cash flow

t = period k = cost of capital

c. Profitability index (PI) is the ratio of the present value of the future cash

flows to the investment.

Formula:

PI = Present value of cash flow/cost of investment

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To ascertain the viability in terms of soundness and condition of the

project if implemented, the following formula were used.

d. Current Ratio is measure of the number of pesos of current asset

available to meet current obligation. It is best-knoww liquidity

measurement. A current ratio of less than one indicates the firm has a

negative working capital.

Current Ratio = Current Assets

Current Liabilities

e. Operating Performance Ratios examine the performance of the

management in the operating business. They are divided into two

subcategories operating efficiency and operating profitability.

e.1 Operating Efficiency Ratios question how efficient would the

management be using the asset they have at their disposal based in the plans

set forth in this study.

i. Net Fixed Asset Turnover Ratio is a measure of the projects

utilization of fixed assets.

ii. Equity Turnover Ratio measures how effectively would the

owners net worth will be used in the project

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Total Fixed Asset Turnover = Revenue

Average Total Net Fixed Asset

Equity Turnover = Revenue

Average Equity

e.2 Operating Profitability Ratios look at how good plans are set in

gaining profit out of the investment in the project.

i. Gross profit margin equals percent of sales available after

deducting cost of goods sold. This percentage is a available to cover selling

general and administrative costs and also earn a profit. It indicates the basic cost

structure of the project and its cost-prize position.

ii. Operating Profit Margin relates the projects profit to its net sales .

The variability of this ratio is a prime indicator of the business risk of the project.

A higher ratio implies that the company has a higher level of fixed costs and

therefore inflexible.

iii. Profit Margin shows how much profit is generated on every peso

of sales.

iv. Return on Net Equity indicates the projects return on all the net

worth employed. It measures return on all available internal funding.

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Profit Margin = Profit

Revenue

Return on Net Equity = Profit

Average Net Equity

G. Review of Related Literature

The literature review identifies and gathers key issues about the quality

and status of printing business, including its influences and the range of

provisions for students and some professionals and possible customers.

At the beginning of the twentieth century, the T-Shirt quickly became an

American favorite. Now, a century later, at the beginning of the twenty-first

century, the T-Shirt remains as popular as ever.

The American T-Shirt began during WWI when American troops noticed

European soldiers wearing a comfortable and lightweight cotton undershirt during

the hot and humid European summer days. Compared to the wool uniforms that

the American soldiers wore, these undershirts were cooler and more comfortable

and they quickly caught on with the Americans. Due to their simple design, these

shirts became known in the USA as "T" shirts or, as we know them now, "T-

Shirts".

By the 1920's, "T-Shirt" had become an official word in the American

English language with it's inclusion in Merriam-Webster's Dictionary. By W.W. II,

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both the Navy and the Army had included the T-Shirt as standard issue

underwear.

Initially pegged as an undergarment, the T-Shirt soon came in to it's own

on the big screen. John Wayne, Marlon Brando and James Dean all shocked

Americans by wearing their underwear on national TV. In 1951, Marlon Brando

shocked Americans in his film "A Streetcar Named Desire" when his T-Shirt was

ripped off of his body revealing his naked chest.

By 1955, the T-Shirt was tolerated worn without another shirt covering it. Then

James Dean made the T-Shirt real cool in "Rebel Without A Cause". JamesDean made the T-Shirt a contemporary symbol of rebellious youth.

In the 60's people began to tie dye and screenprint the basic cotton T-Shirt

making it an even bigger commercial success. Advances in printing and dying

allowed more variety and the Tank Top, Muscle Shirt, Scoop Neck, V-Neck, and

many other variations of the T-Shirt came in to fashion.

The T-Shirt was inexpensive, in style, and could make any statement you

cared to print. The American T-Shirt came into it's own during the late sixties and

seventies. Rock and Roll bands began to realize that they could make significant

amounts of money selling their T-Shirts. Professional Sports caught on and soon

the officially licensed T-Shirt became hot merchandise.

During the 80's and 90's the production of T-Shirts and the mechanics of printing

on them increased the volume and availability. Soon the American T-Shirt was

being called a commodity item in the apparel industry.

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H. Definitions of terms

The following terms are defined as used operationally in this research:

a. Round neck Shirts a collarless usually short sleeves knit shirt without

fastenings usually made of cotton and worn for leissure and sports.

b. Polo shirts a lightweight casual shirt, usually made of knitted cotton

with the small collar and bottoned opening at the neck

c. License a permit granting permission to engaged in an activity that

would otherwise be illegel. The main purpose of a license is to protect the

public interest. A licensed issued by the government agency is required inorder to pursue a certain occupantions, run certain business and enjoy

certain privileges.

d. Ink colored paste use in printing

e. Printing the production of printed matter.

f. Proprietorship is the capacity of an individual in effective and efficiently

managing abusiness towards customer satisfaction and profitability of

services.

g. Proprietor an individual who owns the business himself.

h. Market can be categorized into consumers.

i. Depreciation the systematic allocation of the depreciaable amount of an

assets over its useful life.

j. Cashier - a person in charge of the cash transaction.

k. Design the arrangement of parts, forms, color, especially as to produce

an artistic unit.

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l. Designer a person whose work is making a design.

m. Cotton a soft, white, fibrous mattter around the seeds of various plants

of the mallow family.

n. Rayon any of various textile fibers produced by pressing a cellulose

solution through very small holes and solidifying it in the form of filaments

o. Silk a fine, soft, shiny fiber produced by the silkworm.

p. Linen thread or cloth made by flax.

q. Wool a soft, curly hair of some animals like sheep and goat.

r. Whole sale a sale of goods in relatively large quantities, usually at alower cost per item.

s. Retail the sale of goods in small quatities directly to the consumer.


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Chapter IIMarketing Aspect

A. Product Description

Being different to others make us unique and cool. We are engage in a

digital t-shirt printing business. Statement and personalized shirts nowadays are

really in demand. We offer an instant printed shirt by using a digital printing

machine which is better than the other printing press that only uses heat press

machine. We dont want our customers to wait for a long period of time. We

assure that our customers will only wait for a maximum of ten (10) minutes. The

machine that we use is the latest t-shirt printer.

We sell a finish printed shirt. The customers could choose the designs that

they want. They may choose the color size and type of shirts they want.

Satisfaction of our customers is always our priority.

B. Industry profile

We are in printing industry and there are many competitors engaged in the

same industry. We are confident with the kind of business that we have even

though we knew we have a lot of competitors because we know that we will beat

all of them through the use of our latest digital printer.

We are concern with our customers need and satisfaction. Our price is

very affordable.

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Strengths

The equipment used is the latest and newest machine a printing company

ever had. It could print at the maximum of ten (10) minutes. The finish product is

absolutely clean. No mess at all. The business doesn t require bulk printing of t

shirts, it accepts even a single piece of printing works. The business offers not

just printing of t shirts it also has its finish products to sell.

Weaknesses

The ink consumption and electrical consumptions are the only

weaknesses of the business.Opportunities

The business could also do personalized things aside from printing t

shirts. It could establish another branch in the nearby towns, barangays, and

cities.

Threats

Competitions is a business rivalry; competing for customers or markets

would be a great threat for the business. There could be a lot of printing

industries around the city. Economic crisis as well could have a great impact on

the sales of the business and lastly theft among the employees would also affect

the operation of the business.

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C. Demand

Demand is the quantity of good that buyers are willing to buy. Before

anyone could establish a business that he desire, he must need to know if there

is demand in whatever kind of business hes willing to operate.

Cabanatuan City is considered as one of the most progressive place here

in Nueva Ecija. Modern technology is already spread out all over the City. The

Computation of projected population is presented at Exhibit II B and results of

survey question is presented at Exhibit II A.

All quantitative data gathered were processed using manual or personal

method. Comparative analysis was also used to analyze data.

Historical information on variables involved in forecasting the figures were

inconsistently increasing. Hence, projections were computed through the use of

Statistical Straight-line Method. This method has a formula that goes as follows:

Y = a + bx Where;

= Y - b

X = is the assigned value

B = XY- XY/n a = is the constant

X - ( X) b = is the parameter

N = number of years

Y = is the given data

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Table II-A

Historical Population of Nueva EcijaAges 15 30Class A C

1990 2007Year Population1990 404, 3161995 460, 8592000 586, 9402007 626, 023

Source: National Statistic Office

Table II - BProjected Population

Nueva Ecija

Year Population2010 690, 3832011 804, 2822012 918, 1812013 1, 032, 0802014 1, 145, 979

D. Supply

The supply is the quantity of goods that sellers are willing to sell. If there is

a demand there should always be a supply. Our business is in printing industry

there are many existing competitors.

Kameraworld and Picture frenzy are our inside competitors. They are

accepting t-shirt printing. They need more time to do the printing because they

will bring it to manila. Their price is higher compare to us.

Octograpix, R. Macapagal and Pinoy advertising are some of our outside

competitors. They are using heat press and it takes time to do the job. They dont

accept one time printing because of very expensive cost.

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E. Demand Supply Analysis

The researcher recognizes that the existing capacity of competitors is not

enough to satisfy the demand of the market. The data gathered from the question

no. 1 of survey questionnaires is the demand of the proposed business. Being

conservative, the market share is computed by deducting the hypothetical

projected supply from the projected demand. This is based on the assumption

regardless of continual supply from the existing competitors availed by the of the

market, there is still remaining share for Watta shirt.

To analyze the market share meaningfully, the researchers translated the

projected demand and projected supply in monetary terms. The projected

demand of Watta Shirt is multiplied to unit price. Likewise, the projected supply of

Watta shirt is multiplied to unit price to arrive at the total amount. The total

amount is projected supply is deducted to the total amount of projected demand

to get the total amount of unmet demand.

The computation shows that the unmet demand is seven thousand

eighteen (7, 018) on 2010 eight thousand one hundred seventy five (8, 175) on

2011 nine thousand three hundred thirty three (9, 333) on 2012 ten thousand four

hundred ninety two (10, 492) on 2013 and eleven thousand six hundred forty

nine (11, 649) on 2014.

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Table II CDemand and Supply

Year Demand Supply UnmetDemand

Roundneck t-shirt

Collaredt-shirt

Marketshare

Quantity Price Peso Price Peso Percent2010 833, 406 826, 388 7, 018 250 1, 000, 000 310 935, 580 .84%

2011 970, 901 962, 726 8, 175 250 1, 165, 000 310 1, 089, 650 .84%

2012 1, 108, 396 1, 099, 063 9, 333 250 1, 330, 000 310 1, 244, 030 .84%

2013 1, 245, 892 1, 235, 400 10, 492 250 1, 495, 000 310 1, 398, 720 .84%

2014 1, 383, 386 1, 371, 731 11, 649 250 1, 660, 000 310 1, 552, 790 .84%

Refer to exhibit II A Question no. 2 and Exhibit II C and II D for supporting computation.

Figure I Present demand and Supply

InMilions

Refer to Table II - C

It can be deduced from the figure I that the demand and supply is

gradually increasing in five years, yet the demand is stills exceed the supply.

Hence, revenue is assures through the year.

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F. Marketing Plans

Occupants

Our target markets are the people who are buying t-shirt specially the

personalized t-shirt.

Object

Our products and services are different from the others because of the

digital machine that we are using. Customers may customize their own design.

The can buy ready to wear t-shirts. T-shirts may vary in color, shape, size and

design according to the customers choice.

Objective

Many buyers look for affordable product having high quality. The product

that we are going to sell is affordable. We are rendering service with high quality.

We want to meet our customers satisfaction.

Occasion

Most of the buyers usually buy the products occasionally.

Outlet

Buyers can buy retail or wholesale from us. We are both retailer and

wholesaler.

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Product

In competitive situation, we are different in using the printer. Our

competitors are using a heat press machine. It takes so much time to wait and

more expensive material that will use just to print a shirt.

In our business we are using a digital t-shirt printer, where in ten minutes

is enough to wait the finish product. It is much cheaper compare to our

competitors price.

Promotion

In our opening day we are conducting a big discount a ten percent (10%)

discount for the fisrt (1st) fifty (50) customers. Discounts will be offered to

increase and maintain the volume of customers who will buy in bulk.

There are several ways of promoting our business such as giving pliers

and putting tarpaulin in some place. In other cases the best way to promote our

product to our customer, by personal selling to inform the public that there is

such product.

Pricing

The objective of every business is to maximize profit. The price of our

product is based on what kind of materials we will use. We determine its price

after deducting the cost of raw materials, direct labor and factory overhead. The

full cost of product is presented in Table II D.

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Table II DCost of the Product

Prices Unit PriceDark color Light Color White Average Labor Factory

OverheadInk Total Mark

UpDirectMaterials:Round Neck 80 75 65 73.333 10 25 50 158.333 63.333%Collared 110 100 105 10 25 50 190 61.29%

Sources: Emy Tesoro, and Sulit.com

G. Channel of Distribution

The finished product will be sold at the second (2nd) floor Mega CenterMall, Gen. Tinio St., Cabanatuan City. We are also accepting t-shirt printing job.

Figure II A

Channel of Distribution

Supplier

Raw Materials

Processing

CustomerH. People

The people are committed to the business. They really know the product.

It is easy to promote our product. Our personnel are motivated and we assure

our customers will be satisfied.

Our personnel are very approachable. They have the knowledge to do the

job. Our designer is very artistic he knows a lot in fashion and his design is

different from others.

They serve with a smile. They dont work only for money but to enjoy the

things that they are doing.

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Chapter IIITechnical Aspect

Exhibits III AProcess Flow

Creating

Preparing

Placing

Printing

Packa in

A. Production Process

The exhibits above shows the production process starting from creating

innovative designs, then preparing the t shirt(s) to be used after the

preparations is the placing of the t shirt(s) in the printer and then the printing of

designs on the t shirt(s) and lastly the packaging of the finish product.

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B. Equipment, Machinery, Furniture and Fixture

T-shirt Printer- is the most important equipment in establishing a Digital T-shirt

printing business. It prints any images directly on the textile with nice, bright, and

sharp result. The designs on the t-shirts are waterproof. With our unique software

the operations is quite easy to operate. It is just like a normal inkjet printer. It is

just highly efficient and low cost.

Computer Desktop- it is use to design t-shirts. It can install all the applications

needed in t-shirt printing. The pictures of tools and equipment is presented in

Exhibits III C.Computer Table it holds the computer desktop and t-shirt printer.

Divider it is where the t-shirts are being store/kept.

Cashiers Table it is where the customer is being entertained and the files are

stored.

Bench it is where the customer will sit while waiting for their shirts

Chair it is where the employee will sit while doing their jobs.

Table III-APrices of listed assets

Description Quantity Useful life Depreciations CostComputer Desktop 1 5 P 4,478 P22,390T-shirt Printer 1 5 P 26,000 P 130,000Computer Table 1 5 P 190 P 950Cahiers Table 1 5 P 530 P 2,650

Divider 1 5 P 970 P 4,850Chair 2 5 P 198 P 990Bench 1 5 P 450 P2,250TOTAL P32,816 P164,080

Source: Blass Edward, sulit.com and Mega Center the Mall

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C. Building

The place of the business is located at the second (2nd) floor of Mega

Center Mall, Gen. Tinio St., Cabanatuan City. It is situated in eight (8) square

meter lot; Mega Centers management doesnt allow a lease contract. They only

accept rentals for a maximum of one (1) year. Mega Centers management have

a policy that as long as the mall will opened the stall must be opened. They have

penalty of ten pesos (P10) per minute when the stall will closed but the mall is

still opened. Rental fee is twenty two thousand pesos (P22, 000) per month.

D. Location

Location of the business can be considered as one of the most important

thing to be done in establishing a business. The location should be desirable and

should fit the kind of business that you were conducting.

Our business is located in the second (2nd) floor of Mega Center Mall in

the proper city of Cabanatuan, because it is well populated and that exactly what

we need in our business. The location must easy to reach by the customers.

E. Capacity/Scheduling

The maximum capacity of the printer is two hundred (200) t-shirts per day

but it can operate as long as they are inks. For every five (5) ml of ink one

hundred (100) pieces of half bond paper designed t-shirts could be printed and

for every one (1) liter of ink one thousand (1, 000) pieces of whole bond paper

designed t-shirts could be printed.

The employee work ten (10) hours a day, starting from 10:00 a.m to 8:00

p.m

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F. Utilities and Other Operating Cost

In establishing a business the following cost will incurred:

a. DTI Permit a permit issued by the government specifically DTI that all

the registered business establishment have different names so that they

would have they own identity. P150 is needed for the issuance of the said

permit and additional P15 with the total cos of P165 and it is renewable

every five (5) years.

b. Business Permits and License it is issued by the government (mayors

office) to protect the public interest. It is needed by every establishment tooperate and enjoy certain privileges

Table III - BThe Business Permits and Licenses Fees

Descriptions PriceElectrical permit P20Business name P60

Badge fee P160Business permit P120Personnel permit for five (5) persons P900

Municipal permit P625Total P 1, 885

Source: Municipal Office of Cabanatuan City

c. Fire Safety Inspection Certificate issued by the BFP to assure the

public that the establishment building or occupancy has been duly

inspected for fire safety with the findings that it has substantially complied

with fire safety and protection requirements. Fire safety inspection

equivalent to ten percent (10%) of all fees charged by the building official.

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d. Taxes BIR collects taxes to every establishment to help the government

raise funds for the construction of public highways and other projects for

the benefit of the public. P500 is needed for issuance of BIR form.

e. SSS contribution and Philhealth as an employer it is our duty to give

our employees the benefits that they needed in case of sickness,

maternity, partial/permanent disability, funeral, death, retirement and

health.

f. Electricity the proposed business would not operate when there is noelectricity P1, 000 monthly is enough to pay the electrical consumption of

the business.

G. Production Cost

Fashion nowadays include printed t-shirt or t-shirts with slogans which

really in demand. We could see every teens even those young at hearts wearing

printed or customized shirts anywhere. Every business has their own materials

for them to operate well. In digital t-shirt printing business the raw materials that

are needed are as follow:

a. T-shirts it is where the desired designs are printed, we do have our

own stocks of t-shirts that were supplied to us by Mrs. Emy Tesoro.

Her stall is located at #48 Bldg.A Cabanatuan City Super Market. Wee

see to it that thirty (30) pieces of shirts were maintain for our safety and

sixty (60) pieces of shirts for our reorder point.

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b. Ink every printed must have inks to be able to print whatever designs

the customer wants. One (1) liter of ink is necessarily maintained for

our safety stocks and three (3) liters is the reorder point. The pictures

of the raw materials needed is presented in Exhibit III D. And the

sample pictures of finish product is presented in Exhidits III E.

c. Software it is the software that gives ability to adjust the ink

saturation, sharpen the image, manipulate color contrast add lettering

effects to your artwork and a variety of other art functions only found in

advance programs. The name of the software is Fast ARTIST 1.5Image Editing Software.

d. Pretreatment #1 - This is an odorless, non-toxic inkjet pretreatment

designed to be used exclusively with FastINK white textile ink.It will

help white ink appear brighter.

The direct labor cost is seven nine thousand two hundred (P79, 200)

yearly; the other cost to produce the product is estimated to be tho

hundred fifty percent (250%) of direct labor. The summary of Production

Cost is shown in Exhibit III B.

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Chapter IVManagement Aspect

A. Forms of Business Organization

This business will be established as a single or sole proprietorship as the

most convenient and suitable type of form of set up. The ownership is vested into

one person. The owner enjoys the full freedom of operation. He has the power

and full control of the enterprise. He can do what he want in the operation of the

business. The owner has the authority to give what benefits and profits that

accrue from the business.

He can set his own policies and procedure and makes his own decision

without asking and consulting anyone.

Advantages

The established business is very easy to organize it only need at least one

computer and one digital printer to operate the business. It only needs at least

two (2) employees. It is the first in Cabanatuan City to use a digital printer. Ten

(10) minutes is the maximum time to print whatever designs the customers

desired. It provide fast and high quality services at an affordable prices. The

customers would not wait for a weeks or days for the finish product.

Disadvantages

The disadvantage of the business is the threat that the competitors may

ruin the operations of the business. Its income is subject to tax regardless of

whether it is drawn or not. The business has limited capital and is limited only to

the areas in which the proprietor has expertise.

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B. Duties and Responsibilities

Manager/ Owner

He must be efficient leader in order to win workers trust and full

cooperation.

He must be fair in treating his worker.

He must be contract and negotiate of the market.

He must be responsible in supervising his staff and motivate them to

achieve the company/ business objective.

He must be responsible for the records, files, and keep all the book of

account.

Printer/Designer

Must be knowledge to measure design.

Must be aware to the latest fashion.

Must know how to use computer.

Should be responsible in helping others in their vacant time.

The working hours is ten (10) hours a day. Seven days a week.

Receiver/Cashier

Must contact and negotiate with the customer.

Must know to receive and releases stocks. Must be responsible for the records, files, and keep all the book of

accounts.

Must know how to use computer.

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The working hours is ten (10) hours a day. Seven days a week.

Should be responsible in helping others in their vacant time.

Exhibits IV - AORGANIZATIONAL CHART

Manager/owner

CashierPrinter/Designer

C. Personnel Requirement

A worker is usually assigned to perform tasks, duties and responsibilities

which may differ from those of other job.

In this kind of business are the numbers of workers are composing by the

following:

Table IV APersonnel of the Business

Position Number of workersManager/owner 1Printer/designer 1Receiver/cashier 1

Total 3 workers

D. Qualification Standards

a)Printer/Designer

18-25 years of age

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College level

Computer literate/ knows how to use, designs and encode

With pleasing personality

Must have good moral character

Must be industrious and hardworking

b)Receiver/Cashier

18 25 years of age

College level

Have a knowledge on how to record a transaction

With pleasing personality

Must be trust

Must have good moral character

Must be industrious and hardworkin

E. Compensation Package

In any other business operation compensation is primarily given a

consideration, The owner wants profit while workers wants a higher wage and

shorter time for work. Salary and benefits inspire the workers in performing their

job well. The salary of most workers is based on more or less the same salary

paid in the community for the same type of work. The employees must be paid in

accordance with their knowledge in the business and also with regards to their

efforts in works.

The owner/manager will receive net profit based upon the sales after

deducting all the expense had been used. The cashier and the designer/printer

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will receive their salary as a monthly terms basis. The computation and the

summary of wages and compensation of the employee is presented in Exhibit IV-

B.

Table IV BCompensation Package

Deductions

Position No. Of person Rate SSS Philhealt Monthly Annually

Cashier 1 P200 P200 P75 P5, 725 P68, 700

Designer 1 P220 P233.30 P75 P6, 291.70 P75, 500.40

Total 2 P 144, 200.40

Table IV CProjected Time Table

Gantt Chart

Activities Weeks1 2 3 4 5 6 7 8

acquiring the required capital

applying for loanbusiness registrationcanvassing of machine andequipmentpurchasing and delivery ofequipmentrecruiting and hiring ofworkersTraining of the employeepurchasing, canvassing anddelivery of raw materials

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Chapter VFinancial Aspect

This potion determines the profitability level of the project which is

the generally defined as the relationship of the of the net income after taxes to

the total investment. It is largely based on the available opportunity cost in a

particular period of time and place. It also involves thorough coverage of all the

monetary information of the business. It covers detailed information on the total

project cost, initial capital, sources of financing, financial statements and the

financial analysis. The financial health of the business is assessed in the financialstatements and analysis showing the three important accounting statements

such as income, cash flow and balance sheets. Pertinent financial ratios are also

illustrated describing the over all business liquidity, degree of indebtedness and

profitability. Additional information are also provided such as break even outputs,

sales and prices amount of sales required to earn a certain amount of profit and

the cash payback period.

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a. Major Assumption:

The following are the general major assumption that the study makes:

a. Sales -are the revenues by the business. Sales projection is how much

money will be invested into the business, and the potential markets. The

sales of the business are based on the demand and supply discussed in

Chapter II Marketing Aspect. The business is assumed that on the

average twenty one (21) customers per day for the first year of operations.

The revenue projection is presented in Exhibit V A.

b. Cost of Goods Sold/Cost of Sales-is the cost of inventory that thebusiness has sold to the customers. The cost of sales is discussed in

Chapter III Technical Aspect. It is presented in Exhibit V B.

c. Salary, Wages and Benefits the salaries that the employeereceived is

discussed in Chapter IV Management Aspect. The supporting computation

are presented in Exhibit IV A.

d. Rent-the rental cost of the business is two hundred sixty four pesos (P264,

000) per year. It is discussed in Chapter III Technical Aspect.

e. Advertising-the cost for the advertisement of the business is five thousand

(P5, 000) and it is increased by ten percent (10%) for the succeeding

years. It is discussed in Chapter II Marketing Aspect.

f. Supplies it is the additional materials that are needed by the business. It

is discussed in Chapter III Technical Aspect.

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g. Utilities are the electricity consumed by the business. The estimated

electric consumption of the business is one thousand pesos (P1, 000)

monthly; twelve thousand pesos per year and it is increased by ten

percent (10%) annually. It is discussed in Chapter III Technical Aspect.

h. SSS and Philhealth Contribution is the only benefit received by the

employees. The business assumed that it is included in Factory

Overhead. It is discussed in Chapter IV Management Aspect. The

schedule of SSS and Philhealth Contribution is presented in the Appendix.

i. Depreciation the company estimated that the useful life of tools,

equipment and furniture and fixtures is five years. The total depreciation of

the business is thirty two thousand eight hundred sixteen pesos (P32,

816). The supporting computation is presented in Table III A.

j. Permits, Licenses and Taxes the permits, licenses and taxes that is

paid by the business is presented and discussed in Chapter III Technical

Aspect.

b. Capital Requirement

1. Pre-Operating Expenses

a. Business Permits, Licenses and Taxes this is the cost incurred for the

legality of the business. It is discussed in Chapter III Technical Aspect.

The total cost incurred by the business is nine thousand one hundred

thirty five pesos (P9, 135).

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b. Advertising is the cost incurred for the popularity of the business. It is

incurred by the business for them to know the market. It is discussed in

Chapter II Marketing Aspect. The pre-operating advertising cost is five

thousand pesos (P5, 000) and increased by ten percent (10%) for the

succeeding years.

c. Electricity- the estimated electric consumption of the business is one

thousand pesos (P1, 000) and it is increased by ten percent (10%)

annually.

d. Salaries salaries and wages of the employees are divided in twosegments. The direct labor and the indirect labor. The total cost of salaries

in the pre-operating period is twelve thousand six hundred pesos (P12,

600) per month.

e. Rental Cost the pre-operating period of rental cost incurred by the

business is twenty two thousand pesos (P22, 000) and forty four

thousand pesos (P44, 000) for the rental deposits, respectively.

f. Office Supplies the office supplies pre-operating period is three

thousand pesos (P3, 000).

g. Raw Materials the business have a total of the twenty thousand seven

hundred fifty pesos (P20, 750).

2. Operating Expense

a. Raw Materials it is the primary materials that use to produced the

product. The total purchases are presented in the Exhibit V B.

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b. Advertising is the cost that incurred for the promotion of the business.

The advertising cost is five thousand pesos (P5, 000) and increased by

ten percent (10%) for the succeeding years.

c. Electricity- the electric consumption of the business is twelve thousand

pesos (P12, 000) per year and it is increased by ten percent (10%) for the

next years.

d. Salaries the gross salaries that the employee receive is twelve thousand

pesos (P12, 000) for indirect labor. It is increased by ten percent (10%) for

the next years.

e. Permits and licenses the permits and licenses is renewable yearly. The

total cost that incurred for the permits and licenses is nine thousand one

hundred thirty five pesos (P9, 135).

f. Rental Cost-the rental cost for the year is two hundred sixty four

thousand pesos (P264, 000).

g. Office Supplies the business incurred for the supplies is ten thousand

pesos (P10, 000) for the first year of the operations and increased by ten

percent (10%) for the succeeding years.

h. Interest Expense the business has fifty thousand pesos (P50, 000) loans

payable and it has twelve percent (12%) interest per year. The business

has six thousand pesos (6, 000) interest payment.

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3. Capital Expenditure/Fixed Assets

The following are the fixed assets needed by the business.

a. Tools and Equipment it is the equipment that needed by the business. It

is discussed in Chapter V A. And the pictures of tools and equipment is

presented in Exhibit III C.

Table V ATools and Equipment

DESCRIPTION QUANTITY UNIT UNIT COST TOTAL COST

COMPUTER 1 SET P22, 390 P22, 390

T-SHIRT PRINTER 1 UNIT P130, 000 P130,000TOTAL P152, 390

b. Furniture and Fixture the furniture and fixtures that are needed that by

the business are discussed in Chapter III Technical Aspect. The summary

of Furniture and Fixture is presented in Table V B.

Table V - B

Furniture and FixturesDESCRIPTION QUANTITY UNIT COST UNIT TOTAL COST

COMPUTER TABLE 1 PIECE P950 P950CASHIERS TABLE 1 PIECE P2, 650 P2, 650

DIVIDER 1 PIECE P4, 850 P4, 850CHAIR 2 PIECE P450 P990BENCH 1 PIECE P2, 250 P2, 250TOTAL P11, 690

c. Sourcesof Financing

The business is financed by Mr. Roberto U, Cariazo Jr. The business

has loan payable of fifty thousand pesos (P50, 000) to Atty. Villar with

twelve percent (12%) interest per year. It is payable after one (1) year.

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d. Preparation of Financial Statements

1. Income Statement is the formal statement showing the performance of

the business for a year. It is summarizes the sale, cost of sales, and

expenses incurred for a year. The projected Income Statement is

presented in Exhibit V- C.

2. Cash Flow Statement it provides information about the cash receipts

and cash payments of a business for a year. It is a formal statement that

classifies cash receipts (Cash Inflow) and cash payments (Cash Outflow)into operating, investments and financing activities. The Projected Cash

flow is presented in Exhibit V D.

3. Balance Sheets is a statement that shows the financial position or

condition of the business by listing the assets, liabilities and owner equity.

The Projected Balance Sheets is presented in Exhibit V- E.

e. Financial Analysis

The following is the method that uses to analyze the financial statement.

The computation for the Financial Analysis is presented in Exhibit V F.

a. Net Present Value (NPV )-this refers to the excessof the present value of

cash returns discounted at a chosen cut off rate bovver the amount of the

investment.

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b. Internal Rate Return (IRR) this refers to the rate of return that a long

term investments.

c. Profitability Index (Benefits/Cost Ratio/Present value Index) this refers to

the ratio of the present value of cash returns discounted at a chosen cut-

off rate to the investment requirement.

d. Current Ratio indicates the ability to pay current obligations.

e. Net Fixed Asset Turnover Ratio is a measure of the projects utilization of

fixed assets.

f. Equity Turnover Ratio measures how effectively would the owners networth will be used in the project.

g. Gross Profit Margin equals percent of sales available after deducting

cost of good sold. This percentage is available to cover selling, general

and administrative costs and also earn a profit. It indicates the basic cost

structure of the project and its cost prize position.

h. Operating Profit Margin relates the projects profit to its net sales. The

variability of this ratio is a prime indicator of the business risk od the

project . A higher ratio implies that the company has a higher level of

fixed costs and therefore inflexible.

i. Payback Period this refers to the length of period or numbers of years it

would take to recover an investment.

j. Break Even it is the level of activity (production and sales) at which the

company would be able to avoid a loss. The break even point of the

company is one thousand two hundred one (1, 201) units

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Chapter VISocio Economic Desirability

Socio Economic Desirability the proposed project is hoping to be beneficial

to all for the coming years. The business will continuously achieve its objective.The study will offer entrepreneurs an attached area of investment:

A. Customers the most important factor to be considered in service output

will be the customer. The company must always think about the new

trends of design which rides for the satisfaction of their needs, wants and

desires of the customer

B. Employees the business would require the acquisition of manpower.

And by this means the unemployment rate would be lessen and would

also propagate the generation of income, which would positively influence

the improvement of the standard of living of employed individuals family.

C. Creditors/Supplier the establishment of this kind of business will

promote the growth of other business firms which will provide the raw

materials and services or which will further process its products.

D. Owners in establishing this kind of business the benefits of the owner

are they earn income in this business the benefits of the owner are they

earn income in a decent way and they give opportunity for a better life to

other people.

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E. Community/Society/Church in the presence of economic crisis, people

think how they earn money to minimize their daily expenses. In

establishing this kind of business here in Cabanatuan City would help the

people to have a decent job that would give them a better opportunity to

earn a living for their family. The establishment of this project would

benefit the consuming public through the lowering of retail prices.

F. Government this project will benefit local and national government

because it helps in generating income through taxes. It will contribute for

the improvement of Philippine economy.

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Chapter 7Findings, Conclusion, and Recommendation

A. Findings

A Digital t-shirt printing business was established to expedite the present

way of printing t-shirts nowadays. The present way of printing or manual method

of T-shirt printing is messy and it took long period days to do the finish product.

The business will provide a high-speed printing and more presentable, affordable

and neat t-shirt for its customers. The Business can provide undeniable fast

service. The speed in printing t-shirts will be done in more convenient way. The

business will provide great ease for that t-shirt lovers; they will be benefited by

the business ability to print t-shirts faster. The proposed business is convenient

and easy to operate because it only need a designer and cashier to manage the

business. However the person needs to have knowledge on using computer in

order to create designs and also the cashier needs to be at least College level.

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B. Conclusions:

Based on the findings of the study the following conclusions are drawn:

1. The proposed business would be the first not just in Cabanatuan City

but in Nueva Ecija to use digital t-shirt printing customized designs on

T-shirts.

2. Ten (10) minutes is the maximum time to wait for the finish product.

3. It can provide fast, easy, affordable and high quality services for its

customers.

4. The proposed business could assure its customer that there will beno stain and mess on printed t-shirts. This is one great advantage of

the digital t-shirt printing business over its competitors.

C. Recommendations

Based on the research study conducted, the researchers recommend the

usage of digital t-shirt printer for the printing of t-shirts. The researchers also

recommends that when the operating the business, the employees (for layout)

must have taken computer-related trainings or must be knowledgeable in using

computers such as hands-on operation, encoding layouts/designing, the cashier

must at least college level. The business needs at least one (1) computer to be

used by the employees. As in any other studies in its initial application, the

proposed business is still far from perfect and can still be improved in time. It is

limited to digital printing businesses. For further research the proposed business

be applied and operated.

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EXHIBIT I-B

Araullo UniversityPHINMA Education Network

College of Management and Accountancy

SURVEY QUESTIONNAIRE

Dear Respondent:The researchers, students of Araullo University- Phinma Education

Network, aim to determine the feasibility of establishing a Digital T-shirt PrintingBusiness in Mega Center the Mall, Gen. Tinio,Cabanatuan City, Nueva Ecija as arequirement for the degree Bachelor of Science in Business Administration Majorin Financial Accounting.

Please be assured that the information you will provide for the researcherswill be treated with strict confidentiality. The identity of the respondents will in no

way be disclosed. Your participation and kind cooperation will be of great help inthe completion of this study. Thank you for sharing your time and effort.The Researchers

Respondents Profile

Name: (Optional) Age:Address: Sex:Occupation: Income level:

Instruction: Please encircle your answer.

1. Do you buy T-shirts?a.) Yesb.) No

2. Which T-shirts do you prefer to wear?a.) Round neckb.) Collared

3. What color do you like most when youre wearing t-shirts?a.) Is it plain? or (Please specify the color)b.) Multi colored design t-shirts

4. Would you prefer to weara.) Imitated designsb.) Personalized designs

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5. Which would you prefer?a.) Cotton d.) Linenb.) Rayon e.) Woolc.) Silk f.) Acetate

6. Is 10-minute printing enough for you?a.) Yesb.) No (Specify the time you prefer)

7. What is the affordable price for you? (Round neck)(Collared T-shirts)a.) 270 a.) 310b.) 310 b.) 300c.) 250 c.) 330

8. When do you usually buy T-shirts?

a.) Monthlyb.) Weeklyc.) During occasionsd.) Others (Specify)

9. Where do you usually buy T-shirts?a.) Stall in mallb.) Market stallc.) Catalogue

10. What is your preference in choosing T-shirts?a.) Qualityb.) Pricec.) Brandd.) Style/designe.) According to your mood

11. How do you usually buy t-shirts?a.) Retailb.) Wholesale

12. What kind of personality do you belong?a.) Funk/emo/rockerb.) Sportc.) Simpled.) Fashionistae.) Girlyf.) Other (specify)

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EXHIBIT I-C

LETTER OF REQUEST FOR AN INTERVIEW

Sir/Madam:

As a partial requirement of the course, Bachelor of Science in Business

Administration Major in Financial Accounting, we are conducting a ProjectFeasibilty Study. The undersigned are planning to study on how to establish aDigital T- Shirt Printing Business in Mega Center the Mall Gwn. Tinio,Cabanatuan City.

In this regard, may we request your office to grant us an interview and give someinformation about the study. We assure you that all data we gathered will betreated as confidential.

Thank you.

Respectfully Yours,

Maria Yvette M. Badilla Roberto Cariazo Jr. Ria Zelle DeGuzman

Kylene Maranan Kristine Kaye Valdez

Endorsed by:

Josephine C. Evangelista, PhDInstructor, Project Feasibility Study

Noted by:

Emerita Modesto, CPA, CIA, MBADean, College of Management and Accountancy

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Exhibits I DStructured Interview Guide Questions

1. What made you decide to put up a t- shirts printing?

2. Where is your business site?

3. How long do you spend in this kind of business?

4. How many t shirts do you produce in one (1) year?

5. What are your marketing strategies to expand your market?

6. Where do you avail your goods?

7. What are the agreements do you have in your supplier?8. What are the materials do you needed in the printing the t shirts?

9. Do you use Digital t shirt printer when you print the t- shirts?

10. Are you having an employee/s?

11. How are there monthly salaries?

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51

Exhibits I EResults of Structured Interview

Questions:

1. What made you decide to putup a t- shirts printing?

2. Where is your business site?

3. How long you do spend in this

kind of business?

4. How many t shirts do you

produce in one (1) year?

5. What are your marketing

strategies to expand your market?

6. Where do you avail your

goods?

7. What are the agreements do

you have in your supplier?

8. What are the materials do you

needed in the printing the t shirts?

9. Do you use Digital t shirt

printer when you print the t- shirts?

10. Are you having an

employee/s?

11. How is there a monthly

salary?

Kuya Wilfred

1. It is the only jobs I alreadyknow to do.

2. Perfect locations for the

business

3. Fifteen (15) years

4. Twenty five to thirty thousand

t shirts.

5. I have my own supplier and I

transact directly to all schools

here in Cababatuan.

6. I avail t shirts to Mrs. Emy

tesoro.

7. She I in charge for the t

shirts and only the labor is in

charge to me.

8. T shirts, silk screen, paint

and computer for the designs

9. No, silk screen only

10. No,

11. Nothing


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Structured Interview Guide Questions

1. What are the requirements in renting the space?Is there a contract?

2. What is the agreement for those who wants to rent the space?

3. Are allowing the five (5) years lease agreement? If yes, how is the

payment goes? Monthly, semi annually, annually?

4. Is the rental payment not fixed?

5. What size is the smallest space available for rent? How much? And what

floor?

6. This past five (5) years, how much is the rental for the space?

7. Are you the one who spend money for the renovation of the space? Or the

one who rent it?

8. What is the agreement for the payment of electric bill?

9. Can I ask the total numbers of customers who cane in the place at the

regular days? In holidays?

10. Are advance payment/ deposits needed? How many months?

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Results of Structured Interview

Questionnaires

1. What are the requirements in

renting the space?Is there acontract?

2. What is the agreement for those

who wants to rent the space?

3. Are allowing the five (5) years

lease agreement? If yes, how is

the payment goes? Monthly, semi

annually, annually?4. Is the rental payment not fixed?

5. What size is the smallest space

available for rent? How much?

And what floor?

6. This past five (5) years, how

much is the rental for the space?

7. Are you the one who spend

money for the renovation of the

space? Or the one who rent it?

8. What is the agreement for the

payment of electric bill?

9. Can I ask the total numbers of

customers who cane in the place

at the regular days? In holidays?

10. Are advance payment/

deposits needed? How many

months?

Analiza Go

1. Letter of interviewed,

electrical load, picture ofequipment. Yes

2. Six months to one year.

3. No

4. Fix rental

5. Four sq. M., 2nd floor, fifteen

thousand pesos

approximately.

6. Same

7. You will provide the

equipment; we will provide the

space only.

8. Rendered

9. Estimated twenty five

thousand (25,000) for regular

days and forty thousand

(40,000) for holidays.

10. Yes, three months advance

refundable

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Exhibit II ASurvey Results

No. of Copies Percentage (%)

AgeBelow 20

21 3031 above

Sex :MaleFemale

1. Do you buy t- shirts?A. YesB. No

2. Which t-shirts do youprefer to wear?a. Round Neckb. Collared

3. What color do you likemost when yourewearing t-shirts?

A. PlainB. Multi colored

4. Would you prefer towear?

A. Imitated designsB. Personalized

designs

5. Which would youprefer?

A. CottonB. RayonC. Silk

D. LinenE. WoolF. Acetate

6. What is the affordableprice for you?(Round Neck)

A. 270

155

128112395

280115395

37520395

209186395

241154395

122273395

36344

1644

395

7116122395

39.24

32.2428.35100

7129100

955

100

5347100

6139100

3169100

9211411

100

184

31100

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B. 310C. 250

( Collared)A. 310

B. 300C. 330

7. Is 10 minute printingenough for you?

A. YesB. No

8. When do you usuallybuy t- shirts?

A. Monthly

B. WeeklyC. During occasionsD. Other

9. Where do you usuallybuy T-shirts?

A. Stall in mallB. Market stallC. Catalogue

10. What is you preference

in choosing t-shirts?A. QualityB. PriceC. BrandD. StyleE. According to your

mood

11. How do you usually buyt-shirts?

A. RetailB. Wholesale

12. What kind of personalitydo you belong?

A. Funk/emo/rockerB. SportC. SimpleD. Fashionista

875148395

288107395

1304019431

395

3204827395

14624

3611871

395

31979395

314023343408

395

221312100

7327100

3310498

100

81127

100

376

93018

100

8020100

8105911102

100

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E. GirlyF. Other

Exhibit II BComputation of Projected Population

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Year X Y X XY1990 -2 404, 316 4 -808, 6321995 -1 460, 859 1 -460, 859

2000 1 586, 940 1 586, 9402007 2 626, 023 4 1, 252, 046Total 0 2, 078, 138 10 569, 495

b = XY - XY a = Y - bXn n

X - (X) = 2, 078, 138 (56, 949.50)(0)n 4

= 569, 495 (0)(2, 078, 138) = 2, 078, 138

4 410 - (0) = 519, 534.504

= 569, 495 010

= 56, 949.50

Y = a+bX

2010 = 519, 534.50 + 56, 949.50 (3)= 690, 383

2011 = 519, 534.50 + 56, 949.50 (5)= 804, 282

2012 = 519, 534.50 + 56, 949.50 (7)= 918, 181

2013 = 519, 534.50 + 56, 949.50 (9)= 1, 032, 080

2014 = 519, 534.50 + 56, 949.50 (11)= 1, 145, 979

Exhibit II C

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Demand Analysis

Formula: Projected population x % of willingness x % of users x no. of frequency

Where:

Projected Population% of willingness = Respondent background, Question no. 1, Exhibit II A% of users = Respondent background, Question no. 4, Exhibit II ANo. of frequency = once or twice

2010

ProjectedPopulation

% ofwillingness

% ofUsers

No. ofFrequency

Total Total

.69 1 452, 546.06690,383 .95

.31 2 406, 635.59859, 181.65 .97 833, 406

2011

ProjectedPopulation

% ofwillingness

% ofUsers

No. ofFrequency

Total Total

.69 1 527, 206.85804, 282 .95

.31 2 473, 722.101, 000, 928.95 .97 970, 901

2012

ProjectedPopulation

% ofwillingness

% ofUsers

No. ofFrequency

Total Total

.69 1 601, 867.65918,181 .95

.31 2 540, 808.611, 142, 676.26 .97 1, 108, 396

2013

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ProjectedPopulation

% ofwillingness

% ofUsers

No. ofFrequency

Total Total

.69 1 676, 529.101, 032, 081 .95

.31 2 607, 895.71

1, 284, 424.81 .97 1, 245, 892

2014

ProjectedPopulation

% ofwillingness

% ofUsers

No. ofFrequency

Total Total

.69 1 751, 183.231, 145, 979 .95

.31 2 674, 981.631, 426, 170.83 .97 1, 383, 386

Exhibit II DSupply Analysis

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Formula: Projected population x % of alternatives x % of users x no. of frequency

Where:Projected population

% of users = Respondent background, Question no. 1, Exhibit II A% of Alternatives = Respondent background, Question no. 9, Exhibit II ANo. of frequency = once, twice or thrice

2010

ProjectedPopulation

% of users% of

AlternativesNo. of

FrequencyTotal

.81 1 531, 250690, 383 .95 .12 2 157, 407

.07 3 137, 731

826, 388

2011

ProjectedPopulation

% of users% of

AlternativesNo. of

FrequencyTotal

.81 1 618, 895804, 282 .95 .12 2 183, 376

.07 3 160, 455962, 726

2012

ProjectedPopulation

% of users% of

AlternativesNo. of

FrequencyTotal

.81 1 706, 540918, 181 .95 .12 2 209, 346

.07 3 183, 1771, 099, 063

2013

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ProjectedPopulation

% of users% of

AlternativesNo. of

FrequencyTotal

.81 1 794, 1861, 032, 080 .95 .12 2 235, 314

.07 3 205, 900

1, 235, 400

2014ProjectedPopulation

% of users% of

AlternativesNo. of

FrequencyTotal

.81 1 881, 8311, 145, 979 .95 .12 2 261, 283

.07 3 228, 6231, 371, 737

Exhibit III BProduction Cost

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Direct Materials:

Round neck T-shirts:

Descriptions Quantity Unit Unit Cost Total

Dark color 25 Pieces P 80 P 2,000

Light color 25 Pieces P 75 P 1,875

White 25 Pieces P 65 P 1,625

TOTAL P5,500

Collared T-shirts:

Descriptions Quantity Unit Unit Cost Total

Collored 25 Pieces P 110 P 2,750White 25 Pieces P 100 P 2,500

TOTAL P 5,250

Ink

Descriptions Quantity Unit Unit Cost TotalInk 6.667 Litres P 1,500 P10,000TOTAL P10,000

Direct Labor:

P79, 200 per year (Refer To Chapter IV for supporting Computation)

Factory Overhead:

Direct Labor P79, 200X 250%

Factory Over Head P198, 000

Exhibit III C

Pictures of Tools and Equipments

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T-shirt Printer

Computer

Exhibit III D

Pictures of Raw Materials

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T-shirt

Inks

Software

Exhibit III E

Pictures of Finished Products

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pICpTURES

Exhibit IV- BCompensation Package

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Deductions

Position No. Of person Rate SSS Philhealt Monthly Annually

Cashier 1 P200 P200 P75 P5, 725 P68, 700

Designer1 P220

P233.30P75 P6, 291.70 P75, 500.40Total 2 P 144, 200.40

Computation:

Cashier

P200 per day*30 DaysP6, 000 per month

-P275 BenefitsP5, 725 net monthly salary*12P68, 700 net yearly salary

Designer/printer

P220 per day*30 daysP6, 600-P308.30Benefits

P6, 291.70 net monthly salary*12P75, 500.40 net yearly salary

Exhibits V ARevenue Projections

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68

Round Neck (2010- 2014)

YearCustomer

per Day

Days Weekly Monthly

Total no.of units

sold perYear

PriceTotal

revenue

per Year

2010 12 7 4 12 4, 302 250 1, 008, 0002011 14 7 4 12 4, 704 250 1, 176, 0002012 16 7 4 12 5, 376 250 1, 344, 0002013 18 7 4 12 6, 048 250 1, 512, 0002014 20 7 4 12 6, 720 250 1, 680, 000

Method of Projection: Statistical Straight - line

Collared T shirts (2010 2014)

Year Customerper Day

Days Weekly MonthlyTotal no.of unitssold per

Year

PriceTotal

revenueper Year

2010 9 7 4 12 3, 024 310 937, 4402011 10 7 4 12 3, 360 310 1, 041, 6002012 12 7 4 12 4, 032 310 1, 249, 9202013 13 7 4 12 4, 368 310 1, 354, 0802014 15 7 4 12 5, 040 310 1, 562, 400

Method of Projection: Statistical Straight - line

Total Revenues (2010 2014)Year Total2010 P1, 945, 4402011 P2, 217, 6002012 P2, 593, 9202013 P2, 866, 0802014 P3, 242, 400


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Exhibits V B

Watta ShirtsProjected Cost of Sales

For the five (5) Year Period

Year 1 Year 2 Year 3 YeaDirect Materials:Direct materials beg P20, 750 35, 666 P38, 340.95 P41, 0

Add: Purchases P629, 981.96 P699, 541.76 P819, 381.54 P903, 9Total Materials Available P650, 731.96 P735, 207.76 P857, 722.49 P944, 9Less: Direct Materials End (P35, 666) (P38, 340.95) (P41, 015.90) (43, 69Direct materials used P615, 065.96 P696, 866.81 P816, 706.59 P901, 2Direct Labor P79, 200 P87, 120 P95, 832 P105, 4

Applied FOH P190,066 P207,144 P221,714 P251Total manufacturing cost P892, 265.96 P1, 001, 786.81 P1, 178, 034.89 P1, 270,

Add: finished goods beg - P23, 433 P25, 916.30 P28, 3TGAS P892, 265.96 P1, 025, 219.81 P1, 149, 635.29 P1, 298, Less finished goods end (P23, 433) (P25, 916.30) (P28, 399.60) (P30, 88Cost of sales 860,898.96 988,647.51 1,131,769.29 1,255,5

Computation for Factory Overhead

Year 1 Year 2 Year 3 YearEmployee fringe Benefits 3,699.6 3,849.60 4,250.40 4,599Employer Contribution 6,956.40 7,106.40 7,953.60 8,528Packaging 33,100 35,247 32,474.90 43,467Transportation Cost 15,500 16,500 181,150 19,9

Training Cost 32,400 35,640 39,204 423,12Training Allowance 97,400 107,140 117,854 129,63Other Expense P1510 P1661 P1827.10 2009Total P190,066 P207,144 P221,714 P251,


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Exhibits V C

Watta ShirtsProjected Income StatementFor the five (5) Year Period

Pre - operating Year 1 Year 2 Year 3 Y

Sales P1, 945, 440 P2, 217, 600 P2, 593, 920 P2,Less: Cost of sales (860,898.96) (988,647.51) (1,131,769.29) (1,2

Gross profit 1,084,541.041,228,952.49

1,462,150.71 1

Less: operatingExpense

Advertising P5, 000 P5, 000 P5, 500 P6, 050 PElectricity P1, 000 P12, 000 P13, 200 P14, 520 PEmployee FringeBenefits 3,300 3,699.60 3,849.60 4EmployerContribution 4,634 6,956.40 7,106.40 7Salaries P12, 600 P72, 000 P79, 200 P87, 120 PPermit and license P9, 135 P9, 135 P9, 135 P9, 135 PRental Payment P22, 000 P242, 000 P264, 000 P264, 000 P2Depreciation exp. - P32, 816 P32, 816 P32, 816 POfficesupplies

- P9, 500 P10, 500 P11, 600 P

Interest expense - P6, 000 - - Total operating Expense P49, 735 396,385.00 425,007.00 436,197.00 Net income beforeTax (49, 735) P688, 156.04 P803, 945.49 P1, 019, 043.71 P1,

Income Tax - (166, 446.81) (201, 183.65) (P265, 713.11) (P30Net income aftertax (49, 735) P521, 709.23 P602, 761.84 P753, 330.60 P85


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Exhibit V D

Watta Shirts

Projected Cash Flow StatementFor Five (5) Year Period

Pre Operating Year 1 Year 2 Year 3 Cash Bal. Beg - P18, 435 P556,798.16 P1,039,879.24 Cash flow from Operating

ActivitiesCash inflows fromOperating Activities

Collection from customer - P1, 945, 440 P2, 217, 600 P2, 593, 920 Total cash inflow fromoperating Activities - P1, 945, 440 P2, 217, 600 P2, 593, 920 Cash outflow fromoperating Activities

Payment for Purchases P20, 750 P907, 181.96 P1, 004, 461.76 P1, 154, 793.54 Advertising P5, 000 P5, 000 P5, 500 P6, 050 Electricity P1, 000 P12, 000 P13, 200 P14, 520 Employee Fringe Benefits 3,300 3,699.60 3,849.60 Employer Contribution 4,634 6,956.40 7,106.40 Salaries P12, 600 P72, 000 P79, 200 P87, 120 Permit and License P9, 135 P9, 135 P9, 135 P9, 135 Rental Payment P22, 000 P242, 000 P264, 000 P264, 000 Rental Deposits P44, 000Office Supplies P3, 000 P10, 000 P11, 000 P12, 100 Income Tax

paid

- 200, 188.85 216, 067.67

Interest Expense - P6, 000Total Cash outflowfrom operating

Activities

1,263,316.96 1,552,943.58 1,741,992.18


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Continuation of projected cash flow

Net Cash inflow (outflow) from OperatingActivities

P 117,485 682,123.04 664,656.42 851,927.82

Cash flow fromInvesting Activities

Tools and equipment P 152,392

Furniture andFixture P 11,690

Total cash out flowfrom investing

activities

P 164,080

cash outflow fromfinancing activities

Loan Payment P 50,000

Borrowing P 50,000

Investment P 250,000

Withdrawal P200,000 P 200,000 P200,000

Net cash outflow

from financingactivities P 300,000 P 250,000 P200,000 P200,000

Cash balanceending P18,435 P450, 558.04 P915, 214.47 P1,560, 232.28

Note: Payment for purchases is computed by adding Purchases, Direct Labor and Factory Overhe


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Exhibits V - E

Watta ShirtsProjected Balance Sheets

For the Five (5) Years PeriodPre Operating Year 1 Year 2 Year 3

Assets:Cash P18, 435 P450, 558.04 P915, 214.47 P1,560, 232.28 P 2,Inventory P20, 750 P59, 099 P64, 257.25 P69, 415.50 P7Rent Deposits P44, 000 P44, 000 P44, 000 P44, 000 POffice Supplies P3, 000 P3, 500 P4, 000 P4, 500 PTools and Equipment P152, 390 P152, 390 P152, 390 P152, 390 PFurniture and Fixtures P11, 690 P11, 690 P11, 690 P11, 690 P

Accumulated Depreciation - (P32, 816) (P65, 632) (P98, 448) (PTotal Assets P250, 265 P688, 421.04 P1,125, 919.72 P1, 743, 779.78 P2,

Liabilities:Loan Payable P50, 000 -Income Tax Payable P166, 446.81 P201, 183.65 P265, 712.11 P30Total Liability P50, 000 P166, 446.81 P201, 183.65 P265, 712.11 P30Owners EquityCapital Balance Beg P200, 265 P521, 974.23 P924, 736.07 P1,

Add/(Deduct): Investment P250, 000

Net Income/(loss) (P49, 735) P521, 709.23 P602, 761.84 P753, 330.60 P85Total P200, 265 P721, 974.23 P1, 124, 736.07 P1, 678, 066.67 P2, Less: Withdrawal (P200, 000) (P200, 000) (P200, 000) (PTotal Owners Equity P200, 265 P521, 974.23 P924, 736.07 P1, 478, 066.67 P2, Total Liabilities andOwners Equity P250, 265 P688, 421.04 P1,125, 919.72 P1, 743, 779.78 P2,


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Exhibits V FFinancial Analysis

Net Present Value

Present Value of Cash returns discounted at twelve percent (12%)

Year 1 P 682, 123.04 x .893 = P609, 135.87Year 2 P664, 656.42 x .797 = P529, 731.17Year 3 P845, 017.82 x .712 = P601, 652.69Year 4 P922, 568.37 x .636 = P586, 753.48Year 5 P1, 086, 352.37 x .567 = P615, 961.79

P2, 943, 235(P300, 000)P2, 643, 235

Internal Rate of Return:

*Payback Period = Investment of P300, 000Average cash returns per year = .3571

(P 682, 123.04 + P664, 656.42 +P845, 017.82 + P922, 568.37 +P1, 086, 352.37)/5

** Compute the payback period in the present value of an annuity, it between2.78% and 2.77%.

Profitability Index (PI)Year 1 Year 2 Year 3 Year 4 Year 5

PV ofannualCashreturns

P609, 135.87 P529, 731.17 P601, 652.69 P586, 753.48 P615, 961.79

Divide byInvestment

P300, 000 P300, 000 P300, 000 P300, 000 P300, 000

PI 2.03 1.77 2.01 1.96 2.05

Current Ratio

Year 1 Year 2 Year 3 Year 4 Year 5Current Asset P557, 157.04 P1, 027, 471.72 P1, 678, 147.78 P2, 406, 374.41 P3, 298, 385.03CurrentLiabilities

P166, 446.81 P201, 183.65 P265, 712.11 P308, 337.12 P370, 259.52

CurrentRatio

3.347 5.107 6.316 7.8048.908

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Net Fixed Assets Turnover Ratio

Year 1 Year 2 Year 3 Year 4 Year 5Net income P521, 709.23 P602, 761.84 P753, 330.60 P852, 786.62 P997, 272.22

Ave. totalnet Fixed

AssetsP65, 632 P65, 632 P65, 632 P65, 632 P65, 632

Net fixedassetsturnover

7.949 9.184 11.478 12.993 15.195

Equity Turnover Ratio

Year 2 Year 3 Year 4 Year 5Net income P521, 709.23 P602, 761.84 P753, 330.60 P852, 786.62

Ave. Equity P723, 355.15 P1, 201, 401.37 P1, 804, 459.98 P2, 529, 489.40Equity turnover .721 .502 .417 .337

Gross Profit Margin

Year 1 Year 2 Year 3 Year 4 Year 5Gross profit P1, 076, 607.04 P1, 218, 296.49 P1, 444, 284.71 P1, 598, 343.74 P1, 817, 928.64Net sales P1, 945, 440 P2, 217, 600 P2, 593, 920 P2, 866, 080 P3, 242, 400Gross profitmargin

.553 .549 .557 .558 .561

Operating Profit Margin

Year 1 Year 2 Year 3 Year 4 Year 5COS +O.exp

P1, 257, 283.96 P1, 413, 654.51 P1, 574, 876.29 P1, 704, 956.26 P1, 874, 868.26

Net Sales P1, 945, 440 P2, 217, 600 P2, 593, 920 P2, 866, 080 P3, 242, 400OperatingRatio

.646 .637 .607 .595 .578

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Break Even AnalysisSales Mix

Break Even in units CompositeProduct USP UVC UCM SMR UCM

Round Neck P250 P13.52 P236.48 57% P134.79Collared P310 P31.10 P278.90 43% P119.93

Total P560 P254.72CMR 45.49%

BEP = FCComposite UCM

= P305, 951P254.72

= 1, 201 units

Break Even in Peso

BEP = FCCMR

= P305, 95145.49%

= P672, 631

feasibility studies - tsirt printing

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