Empirical investment group

Copyright© Emperical Investment Group

Mathematics Group Project Work

Submitted By:

•Chhitiz Shrestha

•Manzil Bhattarai

•Sheeba Maskay

•Zhang Peng

•Rahul Rai Submitted To:

Mr. Ramesh Chauhan


IntroductionDepartmental store

◦ Retail establishment which specializes in satisfying consumer's personal and residential durable goods,

◦ Certain department stores are further classified as discount department stores,

◦ Sells products including: Apparel, Furniture, Home appliances, Electronics, Etc.


IntroductionDepartment stores are usually part of a retail

chain of many stores situated around a country or several countries,

The world's largest department store, the Shinsegae Centum City in South Korea,


Plan after taking the loanNote: This report is based on the assumption

that the financial situation in the related banks is sound and suitable. Thus we are allowed to borrow the required sum of money without any sort of difficulty.

Open a medium sized departmental store in the name of Empirical Investment Group (EIG),

Require a loan of about 40 lakhs,Plan to invest 60 lakhs from our personal

funds,


Contd...

Assumed that it would take us of about 3 months to gather the capital,

Allocation of the capital starts from the 1st week of 2010,

Necessary funds will be allocated within the first week of April 2010,


Contd...Locate a suitable place at Baneshwor,Rs. 50 thousand is agreed as advance and

we would require paying a monthly rent of Rs. 1.5 lakhs for the tenure of 10 years,

Plan to import goods from abroad as well,Contractual costs Rs. 50,000 Task to finish within the second week of

April,


Contd…Rs. 12 lakhs each from five members,Joint capital of Rs. 40 lakhs (loan amount) +

60 lakhs (invested amount) = Rs. 1 crore (total capital),

Also need to buy racks and shelves to display the goods,

Separated the budget of Rs. 5 lakh for buying these items,

Rs. 25 lakhs would be spent for the goods that are to be sold in our store,


Contd…Number of employees should not be

greater than 17,Hiring of staffs would be complete within

the end of April or so and cost us Rs. 50 thousand (Approx.)

Would be ready to commence our business form the first week of May 2010.

Note: We assured a piece of land worth Rs. 55 lakhs as collateral,


Tabular Representation

Expenses Amount

Rent advance Rs. 50,000

Contractual Negotiations Rs. 50,000

Racks/Shelves Rs. 5,00,000

Goods Rs. 25,00,000

Employee Hiring Expenses Rs. 50,000

Rent till April (minus advance 50,000) Rs. 4,00,000

Salary till April (from March) Rs. 1,75,000

Petty Expenses Rs.1,00,000

Total Rs. 38,25,000


Graphical Representation

Expenses till May 1st 2010

Rent advance Contractual Nego-tiations

Racks/Shelves GoodsEmployee Hiring Expenses

Rent till April (minus advance 50,000)

Salary till April (from March)

Petty Expenses


Why Himalayan Bank ltd?Aims to help establishment, growth and

expansion of small and medium sized enterprises,

Business houses coming from industrial, trading and service sector can avail of to meet their short-term and long-term financing needs,

Interest rate – 9.5% per annum,Other banks considered

◦ Nabil Bank◦ Nepal Bank Ltd.


Process of taking loanThree common stages:Loan Application Name Legal status Location Qualifications Occurrence Past dealings Dealings in other banks Function


Contd… Amount sought Proceeds Profitability Business worth Capability Security

InterviewInspection and Enquires


When to start repaying the sum?About 3 to 4 months to set up the store,Thus we would need start to repay the

sum from the fifth month,But we start to pay from the first monthWe use separate personal funds to support

the repaying of the borrowed sum,Until the investment starts to yield

income of its own.


Expected earning and expenditure

1 2 3 4 5 6 7 8 9 100

2000000

4000000

6000000

8000000

10000000

12000000

IncomeExpenditure


Mathematical calculation

Present Value = 4000000

Annuity Due:

P.V = 40, 00,000

R= 9.5% P.A = 9.5/12 (per month) = 0.1791

I= 0.0079

N=72 [6 × 12 (in months)]

P.V = P / I × [ 1 – {1 / ( 1 + I ) ^n } ]

4000000 = P / 0.0097 [ 1 – { 1 / (1.0097) ^72} ]

P = 73058.745 (Approx.)


Contd…Interest:

Interest = 9.5% of Rs. 40, 00,000 = Rs. 3, 80,000

So,

In 1 year (total 6 years) = 63,333.33(Approx)

In a month = 5,277.77 (Approx)


References:

Internet◦www.google.com◦www.wikipedia.com◦www.answers.com

LibraryNewspapersMagazines

http://www.google.com/

http://www.wikipedia.com/

http://www.answers.com/


Contact Information:

Nepal Bank Ltd:◦Dharmapath, Kathmandu

Tel.: 422 2397 Email: [email protected] Bank:

◦Thamel, KathmanduTel.: 4227749, 4250201 Email: [email protected]

Nabil Bank:◦Tripureshwor, Kathmandu

Tel.: 44117015-16 Web Address: www.nabilbank.com

mailto:[email protected]

mailto:[email protected]


Thank You

Empirical investment group

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