NMO S4 SPRINT ONE | BUSINESS CASE SCENARIO - 02
Submission BCS
Sprint one
Submission Date & Time: 2021-11-28 02:26:58
Event Name: NMO S4 Sprint One - I Business Institute
Solution Submitted By: Varuni Sangal
Assignment Taken
Financial plan for 1 year and expansion plan for further 4 years.Case Understanding
In a country like India, Most of the people are dependent on fossil fuels based transportation. Government of India is aiming to promote electrical vehicle usage in the country. The government targets for 30% adoption of electric vehicles by 2030. There are some issues due to which people are less keen to buy EVs: which are: 1) India is not having as much of electric Charging stations, People are afraid of battery reliability. 2)Indians want economic product with long time durability, lack of Instances etc.BCS Solution Summary
Through our startup we will help governments aim of electrifications by 2030 by manufacturing electric vehciles.Solution
The Electric Vehicle Industry in India is low as compared to other countries but will be growing industry. The central and state governments have launched schemes and incentives to promote electric mobility in the country and some regulations and standards are also in place.
As per the data , the total number of registered vehicles in India is 230 Million and the market is growing continuously. The government target for 30% adoption of electric vehicles by 2030 will be majorly driven by the electrification of two-wheeler, three-wheeler, and commercial vehicles.
In the case study, we have given a corpus fund which is a personal investment by all the members of the team of Rs.46 lakh and have the option to take loan of 60 lakh if need arises at 16% fixed rate of interest.
Start up required coworking space for 8 people at a monthly rent of 3000/ workstation…
hence total amount for 8 people for a month :- 3000*8
total amount for a year :- 3000*8*12 = 288000
ANNUAL OPERATING PLAN FOR FINANCIAL YEAR 2021-2022
Cost of 1 electronic car :- 700000 (4,00,000 for battery, 2,00,000 for design and 100,000 for other expenses)
In first year, we are producing 10 electronic car.
Cost of 10 car :- 7,00,000 * 10 = 70,00,000
We have taken loan for 50 lakh in the first year.
Total amount in the starting: 46 lakh+ 50 lakh= 96 lakh
Total amount at the start of year 96,00,000
Less: Cost of 10 car 70,00,000
Amount left 26,00,000
Less: interest on loan
(50,00,000*16%) 800,000
Less: rent of workstation 2,88,000
Less: Salary of member (given 35000/
Member, as we have shortage of fund) 2,90,000
Amount left 12,22,000
Less: Amount spent by IT Dept. 50,000
Less: Amount spent on Marketing 3,00,000
Less: Amount spent on Training 2,00,000
Amount left at the end of year 672,000
Now, Our selling price for 1 car is Rs. 13 Lakh
And we assume that we are able to sell 60% of car
Financial plan for Second year
Amount from sales: 13lakh * 6 (10 car*60%) = 78 lakh
And will take loan of another 10 lakh
And issue share in the market for 30 lakh
Total fund at the start of 2nd year is 78,00,000 + 10,00,000 + 30,00,000 + 672000 (amount left from the first year) :- 1,24,72,000
This year, salary will increase from 35000 to 36500.
In second year, we will produce 15 car.
Total amount at the start of year 1,24,72,000
Less: cost of 15 car 1,05,00,000
Amount left 19,72,000
Less: Interest (60 lakh* 16%) 9,60,000
Less: Rent of workstation 2,88,000
Less: Salary (36500*8) 2,92,000
Amount left 4,32,000
Less: Amount paid on marketing 1,00,000
Amount left 3,32,000
Less: 5% Dividend paid to shareholders
(30,00,000*5%= 1,50,000) 1,50,000
Amount at the end of year 2nd 1,82,000
For 3rd year
we assume that we are able to sell 12 car
Sales : 13,00,000 * 12 = 156 Lakh
Amount at the start of 3rd year:- 156 lakh+1,82,000 = 1,57,82,000
Salary will increase from 36500 to 38000.
Amount in the starting 1,57,82,000
Cost of 20 car :- 1,40,00,000
Amount paid 17,82,000
Less: interest 9,60,000
Less : Salary 3,04,000
Less: rent 2,88,000
Amount left 2,30,000
Less: 1% dividend to shareholders 30,000
Amount left at the end of third year 2,00,000
FOR 4TH YEAR:
we assume that we are able to sell 18 car
Sales :- 18* 13 lakh= 234,00,000
Salary will increase to 42000
Now producing 25 car
Amount at the start of year 2,36,00,000
Less: loan repaid of 35 lakh 35,00,000
Amount left with business 2,01,00,000
Less: Cost of 25 car 1,75,00,000
Amount left 26,00,000
Less: Interest (25 lakh* 16%) 4,00,000
Less: rent 2,88,000
Less: Salary 3,60,000
Amount left 15,52,000
Less: Amount paid on marketing 5,00,000
Amount paid 10,52,000
Less: 10% dividend paid to shareholder 3,00,000
Amount left 7,52,000
FOR 5TH YEAR
we assume that we are able to sell 25 car
Sales: 25*13 lakh = 325 lakh
Amount paid at the start of the year :- 325lakh+ 752000 = 3,32,52,000
Producing 35 car this year
Salary increase to 50,000
Amount in the starting :- 3,32,52,000
Less:- repaid remaining 25 lakh loan 25,00,000
Amount left 3,07,52,000
Less: cost of 35 car 2,45,00,000
Remaining amount 62,52,000
Less:- Rent 2,88,000
Less:- Salary 4,00,000
Amount left 55,64,000
Less: Amount paid on marketing 10,00,000
Amount left 45,64,000
Less : 10% dividend 3,00,000
Amount at the end of 5th year 42,64,000
Conclusion
we will follow above financial plan for this year and further years and by the time requirements is needed we will also alter some of the things.Attached File Details
Comments
Article Type: Business Case Scenario, Case Study Solution Submission
Business Case Detail
Title: NMO S4 SPRINT ONE | BUSINESS CASE SCENARIO - 02
Type: Case Study
Stream: Management
I Business Institute
Team SPIRIT
Total Team Points: 31500
Invincible Ingenuity
Total Team Points: 23000