Assumptions

The estimate of this project is on the basis of the following:

  1. The unit will function for 300 days in a year.
  2. The capacity utilization has been assumed at 60% in the first year and 65 % afterwards.
  3. The price of the raw material and services are taken at the prevailing market rates.
  4. Wages and salaries have been increased by 5% every year.
  5. Repairs, insurance, telephone charge, etc., are taken at lump.
  6. No contingency provision is made since the costs are taken at prevailing market price.
  7. Depreciation has been calculated on Written down Value Method.
  8. Income tax has been calculated at the rate applicable to proprietary concern.