8/9/2019 Scba of Yummy

1/11

PRESENTED BY:

NEHA ARORAPALAK THAKKAR

CHETASH MEHTA

SANDEEP KR. YADAV

8/9/2019 Scba of Yummy

2/11

INTRODUCTION

PRODUCT:- INSTANT NOODLES

BRAND NAME:-YUMMY NOODLES

SECTOR:-FAST MOVING CONSUMER GOODS

COMPANY NAME:- YUMMY NOODLES PVT. LTD.

8/9/2019 Scba of Yummy

3/11

SHADOW PRICING

Firstly we need to decide that whether the good is Tradable orNon-Tradable ?

Secondly we need to see that whether the good is Merit or De-Merit ?

Source of shadow prices.

How our project is going to effect following markets

Factor market:- ?

Product market:- ?

8/9/2019 Scba of Yummy

4/11

ABOUT RATIONALE

Market Imperfection

Externalities

Taxes and Subsidies.

Impact on income distribution

Concern for Savings.

8/9/2019 Scba of Yummy

5/11

YUMMYS P&LA/C

ITEMS INRS FOREX TOTAL

SALES 16,20,000 - 16,20,000

LESS

COGS ( 5,74,700 ) - ( 5,74,700 )

GROSS MARGIN 10,45,300 - 10,45,300

OFFICE ANDADMIN

( 3,60,000 ) - ( 3,60,000 )

ADVT ANDPROM

( 3,40,000 ) - ( 3,40,000 )

PROFIT 3,45,300 - 3,45,300

8/9/2019 Scba of Yummy

6/11

DOMESTIC RESOURCE COST

y DRC= A+B+C / (P-( Q+R+S+T)* Exchange rateWhere,

A= annual charge on domestic capital at the rate of 10%

B= annual depreciation on domestic capital at 8%

C= annual cost of non-traded inputs

P= sales realization at international prices (exports)

Q= annual charge on imported capital assets at 10%

R= annual depreciation on imported capital assets at 8%S= annual cost of imported inputs

T= annual cost of domestically procured, but tradable inputs

Exchange rate= Rs.43.38 per US dollar

Sales realization at international price (export) is estimated around 280 million

8/9/2019 Scba of Yummy

7/11

CAPITALEMPLOYED IN THE PROJECTITEMS T.C ( IN lacks ) DOMESTIC CAP IMPORTED CAP

LAND 15 15 -

BUILDING 10 10 -

PLANT 140 40 100

T AN & 5 5 -

MI FIX D A T 30 20 10

P M & P 0OP XP 45 45 -

ONTING N I 25 05 20

W. .P 40 25 15

TOTAL AP MP 310 165 145

HA G ON AP (10% )

16.5 14.5

D P ON AP ( 8% ) 10 10.4

8/9/2019 Scba of Yummy

8/11

ITEM TOTAL COST (

IN MILLION )

NON-

TRADABLE

TRADABLE

COMP

IMPORTED

COMP

RAWMATERIAL

140 15 100 25

UTILITIES 20 15 05 -

REPAIRSMAINTENANCE

10 10 - -

WAGES SAL 20 20 - -

RENT INS 03 03 - -

ADM EXPENSE 05 05 - -

SELL EXP 07 07 - -

TOTAL OP

COST

205 75 105 25

8/9/2019 Scba of Yummy

9/11

DRC of the projectDRC= 16.5+10+75/280- (14.5+10.4+105+25)*43.38

DRC= 35.20

Thus the domestic resource cost per USD saved is Rs 35.20,

which is lower than the present exchange rate. Hence it isdesirable to manufacture the product in the country ratherthan import it.

8/9/2019 Scba of Yummy

10/11

TANGIBLE BENEFITS

Low cost Employment opportunities Income for govt. Hygienic Food Inflow of Forex

INTANGIBLE BENEFITS

Time savingAdditional food option Enjoyment Easy to cook

TANGIBLE COST

Diversion in wheatconsumption

Increase in Consumption exp.

INTANGIBLE COST

Change in Food Habit

8/9/2019 Scba of Yummy

11/11