A feasibility study on the expansion of machineries & equipment using capital budgeting techniques for Dataman Systems Corporation for the year 2000-2004.

• Main Author: Pe, Sheelah Marie.
• Format: text
• Published: Animo Repository 1999
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/1683
• Institution: De La Salle University

Executive Summary. In pursuing Dataman Systems Corporation's (DSC) mission of product excellence, continuous research and development, service reliability, and to lead in manufacturing and marketing of filing systems, the proponents suggest that the expansion of machinery and equipment is appropriate. First and foremost, the proponents looked into the market opportunities, which was evidenced by the demand-supply gap in the filing industry market. The forecasted gaps in units are 1,052,304 for year 2000, 1,110,318 for year 2001, 1,159,100 for year 2002, 1,262,241 for year 2003, and 944,703 for year 2004. This will be the company's basis for acquiring the machine. The gap means a chance to further penetrate the market. Due to the acquisition of the new machinery, there will be an increase in the economies of scale of production. Thus, profit margin was maximixed, compensating the cost of leasing the machine. Subsequent to the market study, the technical feasibility of the project is analyzed. Efficiency of production is realized with the maximum of 60 pieces per minute capacity of the machine. The processing time is, therefore, shortened. Lower cost of financing was sought through leasing, which gave the company time to generate sufficient funds for its expansion. As compared to debt financing, leasing showed an advantage for the company. The project cost for leasing is the initial investment of PhP 2,200,000. Financial analysis, further discussed the possible outcome and performance of the company. Capital budgeting techniques quantified the viability of the desired results for the project. Comparison of using the machine with that of labor intensive production was done to prove the advantage of using the equipment.