Question

Prepare the projected profit & Loss statement for the year 2021, 2022, and 2023. Please calculate the payback period for the frim.

Our AAA sightseeing tour plan will start with total capital of 90,000 USD on 2021 January.

Projected Costs are as follows

Vehicle costs  34000 USD

Software & Apps cost 4000 USD

Location Rental for 250 USD per month for 3 years contract after first-year rental cost, it will increase 5% for the next coming 2 years.

Vehicle Maintenance fees will be 200 USD per month for 3 years contract with outsource company,

after 1st startup year, the cost will increase by 5% for the next coming 2 years.

Total staff salary will be USD 2400 per month for the first year and 5% will increase for the next coming years

Overall general expenses are USD 15000 for the first year and the second and third year will be increased by 5%.

Taxes will be  5% charged.

Answer 1

Solution:

Vehicle and Software will be regarded as assets, and not become a part of the expenses of P/L.

Projected Cost
Particulars	2021	2022	2023
Location Rental	3,000	3,150	3,308
Vehicle Maintenance Fees	2,400	2,520	2,646
Staff Salary	28,800	30,240	31,752
General Expenses	15,000	15,750	16,538
Total Cost	87,200	51,660	54,243

Note: Since the revenue is not given in the question the profit or loss cannot be ascertained. Also, the annual cash inflows cannot be ascertained, so the payback period cannot be calculated.

(Payback Period = Initial Investment / Annual Payback)