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Assignment No. -
Date of Dispatch -
of Assignment at CODE
An offer has been given by a Charitable Trust to develop and build a
facility on a 10,000 sq.m. of plot in a prime locality of Pune where 5000
sq.m. of area will be used by the trust for housing, health facilities for
senior citizens . 5000 sq.m. will be given free to developer as a cost of
development.
Cost of land is Rs. 10,000/ sq.m.
Specifications of flooring:
10% Granite
Discuss the financial viability of the project and the financial planning of the
project. Developer would like to have minimum 18% of net profit on his
investment. Developer can invest only Rs. 10 lakhs as his own funds and can
INTRODUCTION:
Construction Project is a mission, undertaken to create a unique facility, product or service
within the specified scope, quality, time and costs. Project can also be defined as
activities in the project right from the start to the end of the project. A developer must be
fully aware about all the key financial aspects of construction.. He must be able to control
financial flows in an orderly manner for reaping the results in form of profits..
Profit from the project can be harvested by considering, implementing and following the
of people time.
Scheduling tasks.
construction.
Most construction projects start with a need to have a new facility long before
designers start designs and drawing of the projects and certainly before field
- Conceptual analysis.
a charitable trust and using 5,000 sq. m area of land free as a cost of
production.
As the developer has to earn profit by investing in the land of 5,000 sq. m area
As developer can invest only Rs 10 lakhs from his own fund and loan of
building in only half of the available land i.e. 2500 sq. m of land is the most
flat of the purposed residential building can be sell at higher prices earning a
an area of 500 sq.m X 500sq.m. Ground floor of the building will be meant for
All 3 BHK flats will be front facing and linked with the other two no. 2 BHK
flat via. a lobby. Balcony will be provided at all three no. 3 BHK flats. Flats
will be constructed and then will be fully furnished. Fully furnished flats will
then be ready for selling to the costumers with ready to move option
with security is also been provided so flat will going to attract the potential
buyers easily. Posh location will also add to the amount on which flats can
the flats of the building is a sure sort assurance of profit. So this investment
on this construction project is a totally win win situation for the developer
PROJECT SCOPE
As it is a Housing project the specifications in general for the residential
Engineer.
Masonry: All Masonry will be of Concrete Block and internal partition with
shrinkage cracks. Internal walls will be neeru finished and External walls
Framework: Door frames of Sal wood, Main door of Teak Wood with
French polish, Internal Doors Marine Flush Door with Oil paint.
Kitchen: Granite platform with Stainless steel sink with drain board and
CPVC pipes will be used. All External piping and SWR pipes used will be of
Finolex.
Sanitary ware: All Sanitary ware will be of Standard range of Hind ware or
Crabtree or equivalent.
TECHNICAL STUDIES
on the rise. Since all materials used for construction are in high demand
in the planning stage itself the quantities have to be worked out and
management and planning as it gives the idea that how much finance
(Rs.)
1. R.C.C. 2,000,000
2. Reinforcement 1,000,000
3. Masonry 80,0000
4. Plastering 1,000,000
5. Flooring 1,000,000
6. Framework 30,0000
8. Plumbing 20,0000
high and hence the whole project needs to be analysed and phased out
in order to obtain maximum output from the labour and planning the
area of work without much hindrance throughout the site, and easy flow
Also the cost of labour force i.e. both skilled and unskilled has increased
drastically since few years now. The main drawback for the projects
The project Design is the main criteria on which the whole budget as
well as the end profit depends. So the design of the structure always
needs to be handled at the highest priority and enough time given to the
designer to make use of all the objectives to maximize the profit by using
Also care needs to be taken during designing that the whole project
of the buyer.
The Design should be in such a manner that the buyers can also relate
Working out the Task & Time schedule of a project in preliminary stages
for a project in the form of various tasks, stating the specific time to be
For this project a total time period of 2 years has been considered and
all the construction activities will be carried out in this tenure. Project
PHASE-I
PHASE-II
Polishing
PHASE-IV
(Rs.)
Hence the total investment for this Housing Colony Construction Project
finance and ascertaining the cost of project. Finance can be obtained from
different sources and since finance arranged from different sources have
different characteristics in terms of risk, cost and control. Sources of finance
depend upon the business structure. There are several sources of finance
like:-
the project duration is of 2 years and developer seeks early and quick profit
Middle term and Short Term Finance seems to be the feasible options.
Types of finance considered for the Construction project are stated as
under:-
Lease Financing Leasing is a general contract between the owner and user
of the asset over a specified period of time. The asset is purchased initially
by the lessor and thereafter leased to the lersco company. As for this
project total available land is 5000 sq m and only 2500 sq m of land has
been used to develop the project the remaining land of 2500 sq m can be
use as a lease item and finance can be managed from that. So after giving
form of advance down payment for booking the flats. Hence remaining fund
Interest Calculations
Rate of interest - 15 %
Years -2
= 15,00,000
all 4 phases
lakhs(lease amount)
Conclusion
As the total investment for this Construction Project is Rs 1 crore 35 lakhs and
by selling the flats amount of Rs 1crore 18 lakhs has been earned so this
project is fully financially feasible and have potential to reap high profit for the
developer.
Profit calculation
Total cost of project = Rs 13,500,000
= 9,000,000.
= 9,000,000