1. Sukkur institute of business administration
Feasibility report
On
Wireless Network at Sukkur
Course: Project Finance
Class: bba-vi
Assigned by:
Mr. Abdul khalique daudpota
Members:
Beena zaidi, Muhammad shaique khan, sheeraz Ali sheikh

2. May 5, 2011
Table of content
A) PROJECT OBJECTIVES
B) EVALUATION CRITERIA
C) OPPORTUNITY RATIONAL
D) MARKETING PLAN
E) HUMAN RESOURCE REQUIREMENT
F) START-UP COST
G) FINANCING STRATEGY AND COST OF CAPITAL
H) ESTIMATED FINANCIAL STATEMENT

3. A. PROJECT OBJECTIVES
CoolNet’s objectives for the first year of operation include:
• The introduction of an innovative product that offers an affordable and convenient way for
Internet users to access the Internet away from home.
• The creation of a unique environment that allows traveling business people access to their own
files and programs.
• The placement of 100 public Internet terminals operating throughout the Sukkur
B. EVALUATION CRITERIA
 Quantitative
1. Return( NPV, PI, DPBP)
2. Cost
3. Equity
4. Market demand and its stability
5. Risk
 Qualitative
1. Government and community support
2. Potential competition and even threat of it
3. Personal interest and group spirit

4. C. OPPORTUNITY RATIONAL
We have taken this idea, because popularity of the Internet continues to grow at an
exponential rate, easy and affordable access is quickly becoming a necessity of life. We will
provide to internet users and business persons alike the ability to access the Internet, via our
wireless connection away from homes and the offices at an affordable cost. Internet users,
young and old, will be able to access the internet while they stay at hospitals, wait at airport,
and wait at railway station and sitting in parks.
We analyzed that there is a massive demand for internet. Businesses
are moving from traditional to virtual markets and the trend of using social web sites is
increasing day by day so there is a huge demand from customers for this service. Technology
is growing very rapidly so every business person wants to be in touch with its business every
time from everywhere and youth wants to chat with each other and family members who are
living away from their relatives so they want to be in touch with them, so we have recognized
the huge gap in the market and we want to avail that opportunity. We look to be the leader in
introducing an innovative and quality public Internet to our current market. We will add
value to our community by maintaining a quality product and providing a valuable
service. We will utilize the most advanced technology.
RISKS:
The risks involved with starting COOLNet are:
• Will there be a demand for the services offered by COOLNet in City?
• Will the popularity of the Internet continue to grow, or is the Internet a fad?
• Will individuals be willing to pay for the service COOLNet offers?
• Will the cost of accessing the Internet from home drop so significantly that there will not
be a market for public Internet terminals?

5. D. MARKETING PLAN
A. Targeting;
CoolNet’s connectivity points will be a magnet for local and traveling professionals who desire to work
or check their email messages in and away from the office. These professionals will use CoolNet’s
connectivity points in their computers or laptops. CoolNet’s target market covers a wide range of ages:
15 years younger to 60 years old men.
B. Product:
COOLNet provider will provide customers full access to email, WWW and other
applications. We will provide clients and customers with a unique and innovative product and
service. We will provide this service to our customers with the help of PTCL. We will provide
this service in the crowded areas of the sukkur city such as, in hospitals, at railway station, at
airports and in parks etc. We will purchase our domain (www.coolnet.com). Whenever
customers will enter in such areas with their internet devices, they will find there access to
internet and if they want to be registered, they can open our homepage without registration and
can register them there and avail our services. The fees of service will be charged according to
time usage; as much as they will avail our service they will be paid according to that time. The
payment system will be either through credit card or through our account in Muslim Commercial
Bank (MCB) as they feel easy. First we want to cover such specific areas of sukkur city after
success in it then we will expand our business and cover the whole city..
C. Price
. We will charge different prices from non-executive and executive customers according to different
packages such as student packages and business packages.
Customer Detail Price
Membership fees For all Rs. 500/=
Student Unlimited download Rs. 1000/month
+quick access
Business men Unlimited download Rs. 2000/month
+quick access
D. Place

6. We will try to cover as much area of sukkur as we can. Our area decision depends on the
number of users of the internet available in a particular area and the quality of service where we
can provide the qualitative access to our customers because of technological limitations; we can
increase our area up to certain limit.
E. Promotion
We will implement a pull strategy in order to build consumer awareness and demand. Initially, we have
budgeted Rs: 100,000 for promotional efforts which will include advertising and marketing of our
product. We realize that in the future, when competition enters the market, additional revenues must
be allocated for promotion in order to maintain market share.
Promotion strategy will be according to our business as our business. We use multichannel for
promotions (social marketing campaign such as on facebook, pamphlets, T.V ads and other print media).

7. E. HUMAN RESOURCE REQUIREMENT
Human resource requirements for Coolnet listed below:
No Designation Numbers of employees Salary
01 Business Manager 1 25000
02 Accountant 1 12000
03 Computer Operator 1 10000
04 Line man 2 16000
05 Helper 1 6000
06 Peon 1 6000
Total 7 75,000

8. F. START-UP COST:
Units/ Per unit
Cost of Project months Price
Total
Office
Prepaid office on rent 12 25,000 300,000
A) Total rent expense 300,000
Office equipment
Office chairs(04) 04 3,500 14000
Simple chairs (06) 06 1,500 9000
Air condition (03) 03 40,000 120,000
Computer 01 25,000 25000
Office table(03) 03 8,000 24000
Telephone set(02) 02 1,000 2000
Computer accessories 10000
Operating Equipments 3,300,000
(b)Total cost of equipment 204,000
Initial Investment required (a+b) 3,804,000

9. G. FINANCING STRATEGY AND COST OF CAPITAL
Our Business will be mainly (76%) financed by equity, whereas about one third (26%) of the cost
would be financed by bank loan.
FINANCING
Equity 2,804,000 74%
Debt 1,000,000 26%
Total claims 3,804,000
As our business required large amount of cash and in order to start-up the business, only Equity
cannot fulfill the requirements of investment. We will borrow Rs: 1,000,000 from the bank we
will pledge our personal property.
Cost of equity
three year risk Free rate* 12.0%
Plus: Risk premium 15.0%
Cost of equity 27.0%
Cost of Debt 25.0%
WACC 25.18%

10. KEY ASSUMPTIONS
Sales growth 20.00%
increase in cost of raw
material 10.00%
Increase in staff saleries 5.00%
Inrease in utilities 15.00%
Increase in office expenses 5.00%
Depreciation:
WLAN 3years life
OFFICE EQUIPMENTS 3years life
A.P 3years life
SG and A growth 10.00%
Interest Expense 25%
% increase rent expense 10%
Tax rate 20.00%

11. H. ESTIMATED FINANCIAL STATEMENT:
Balance Sheet
ASSETS 0 1 2 3
400,00
Cash 0 1,288,133 3,285,880 5,877,219
300,00
Pre-paid Month 0 330,000 363,000
700,00
Total current 0 1,618,133 3,648,880 5,877,219
204,00
Office Equipment 0 204,000 204,000 204,000
Depreciation (office
equipments) - 68,000 136,000 204,000
204,00
Office equipment, net 0 136,000 68,000 -
Technical 2,400,00
Equipment+Cable+UPS 0 2,930,000 2,930,000 2,930,000
Depreciation - 800,000 1,776,667 2,753,333
2,400,00
Technical Equipment, Net 0 2,130,000 2,396,667 176,667
500,00
WLAN controller 0 500,000 500,000 500,000
Depreciation - 166,667 333,333 500,000
500,00
WLAN controller, Net 0 333,333 388,889 -
3,804,00
TOTAL ASSETS 0 4,217,467 6,502,436 6,053,885
LIABILITIES
1,000,00
Notes Payable 0 1,000,000 1,000,000 1,000,000
Interest Payable - 250,000 500,000 750,000
1,000,0
Total liabilities 00 1,250,000 1,500,000 1,750,000
EQUITY
2,804,00
Owner's Equity 0 2,804,000 2,804,000 2,804,000
Net income 163,467 2,198,436 1,499,885
TOTAL LIABILITIES AND 3,804,00
EQUITY 0 4,217,467 6,502,436 6,053,885

12. Statement Of Cash Flows
0 1 2 3
Net Income - 463,467 899,413 1,493,005
Depreciation - 1,034,667 1,211,333 1,211,333
Operating Cash Flows - 1,498,133 2,110,747 2,704,339
Initial Expenditure (3,404,000) 860,000 363,000 363,000
borrowing 1,000,000 250,000 250,000 250,000
Equity 2,804,000
Change in Cash 400,000 888,133 1,997,747 2,591,339
Initial Balance 400,000 1,288,133 3,285,880
Closing Balance 400,000 1,288,133 3,285,880 5,877,219
Free Cash Flows (3,404,000) 838,133 1,947,747 2,904,339
FREE CASH FLOW 0 1 2 3
Profit after tax - 463,467 899,413 1,493,005
Add back depreciation - 1,034,667 1,211,333 1,211,333
- 1,498,133 2,110,747 2,704,339
Subtract capital expenditures 3,404,000 860,000 363,000 -
(3,404,000) 638,133 1,747,747 2,704,339
Add back after-tax interest - 200,000 200,000 200,000
NET WORKING CAPITAL 1,288,133 3,285,880 5,877,219
FCF (3,404,000) 838,133 1,947,747 2,904,339

13. INCOME STATEMENT
1 2 3
Sales 3,840,000 4,608,000 5,529,600
Gross profit 3,840,000 4,608,000 5,529,600
Selling And Admin Expense:
Advertising Expense 35,000 35,000 35,000
Salaries Expense 900,000 945,000 992,250
Utilities Expense 576,000 662,400 761,760
Total Selling and Administrative Expense 1,511,000 1,642,400 1,789,010
Income Before Depreciation 2,329,000 2,965,600 3,740,590
Depreciation (office Equipment+wlan+ap) 1,034,667 1,211,333 1,211,333
Interest Expense 250,000 250,000 250,000
Rent expense 300,000 330,000 363,000
Other expense 150,000 50,000 50,000
Pretax Income 594,333 1,124,267 1,866,257
Income Taxes - Total 118,867 224,853 373,251
Net Income 475,467 899,413 1,493,005
Value
WACC 25.18%
Year 0 1 2 3
FCF (3,404,000) 838,133 1,947,747 2,904,339
Terminal 6,053,885
Total (3,404,000) 838,133 1,947,747 8,958,224
NPV $2,456,759.47
IRR 61%