Read the case study (see attached 5 images), and answer the following questions, including the graph:

1. Analyze and categorize various expenses into fixed cost, variable cost, and initial investment.
2. Find the break-even point and plot a CVP graph.
3. How many bricks need to be sold to earn a targeted income of INR 2 million per year?
4. How do volumes affect the return on equity?
5. What advice can be given to the owners?

1 of 6 vivty Publishing FLY ASH BRICK PROJECT: FEASIBILITY STUDY USING CVP ANALYSIS In April 2013. Rajly Sharma had a business plan. For quite some time, he had been doing some marist research exploring the pointial of his "decam project"- cuablisking a fly wih brick manufacturing unit and had won hage potential for profit in the project. His long time friend Alok Gupts was also interested but had a few doubti regarding the feasibility of the project. Sharma, on the other hand, was sure of his plin. Years of work is the construction industry had shown him the potential of using large volumes of fly ah bricks in construction, especially in housing and infrastructure ProbW. On the buis of preliminary analysis, he decided to act up a plant that would have the capacity to medicare four million bricks per year. Though actual production would depend on market doneed the parterre estimated that 1:4 million bricks could be sold per year at an woorape selling price of RAT,010 per 1 000 bricks He wanted to ascertain the femibility of the project wing a cat-volume-profit (CVT) BACKGROUND Fly ab was a maiden obtained after combustion of coal. India utilized huge quantities of real to protect themal power, it major power generation source. When pulverized coal in bumed to generate beat, the reyidual product contained up to 30 per cent By ash. The fly ach from the suit flug gas was gellocked at various pages of the fluc pas path and at the duit collectors fitted before the final chimary. Markol Bench revealed that coal would continue to be used as the prime fuel for many more yours. resulting in a great amount of fry ash gungration One challenge for the disposal of the fly wih produced was the need for a massive amount of land, since it was usually dumped on the pound as a waite material It was estimated that the land requirement for the dumping would be warby 1,000 square kilongings of land by the year 3015 Locking at the vast volumes of fly ash produced, and the fact that Indian cool contained high ash content (to the level of 30 6 50 per Papa 2 cent, it was boccivary to devise cilcolive son for in Accordingly. Bly ash was analyzed by in appropriateness in various wies such it manufacturing of ceronly files, bricks, building muterich, cac. Fly ask as a continuation material was considered appropriate on bay socounts. First, there wore environmental conceme about the traditional way of making bricks from clay that comprised topsail Removing this top layer makes the land infertile for a long period, Using fly with for making bricks irateed of clay would thus help preserve the fertility of the mail Second, it was cutiminted that there would be a subuntil sheetfull in the availability of different types of building merits, ischoding bricks.' With the country proving at wach s rapid poon, the poverment was com on promoting fly ash tricks in the construction necker. This would crible a waite product to be wied as a construction material and whoof clay would thus help praterve the fertility of the soil, Second, in was estimated that there would be a whenbil shortfall in the mulability of different types of building materials, including bricks.' With the county prowing of such a raped pape. they poorminight was bom on promoting fly ash bricks in the Miningthen orby This would mustly s wade product to be word as a polakrection material and sho MANUFACTURING PROCESS The National Thermal Power Corporation (NTIC) of India had developed technology to replace bam! clay bricks with fly ach it's conunasoon material for building well. The manufacturing process for theme bricks, known as fly ash-lime-gypsum bricks, required inmate mixing off fly ash, and time and gypsum Bypoem and live were fire! pound to fine particles and then fly ah and and cold to make s fine bind The mile of the input material was an follows Sand: 10 prom Lime: 10 to 20 pit cont Water am suled to the mis to form a pale after which the moisture was transferred to month find in a hydraulic mechanical press. The bricks were later dried in the spin for one or bad days and then cured NTPC cutablished pilot ask brick marufix foring plants at its 13 thermal power plants, Approximately 150 million bricks had slickly been manufactured in theie plants and used for in house comoption. To quirining the quality of manufactured tricks, it was soground that the now take manufacturing plants follow the piklines of the pubily Handed of Is 1289:Tim SHARMA'S BRICK PROJECT referred to a portion of the chances of Dr. Abdul Kalam, a former Indian president, who had met conous over the depend of fly ash by saying to the ure of val for power generation results in hercard quantum of fly ash productke, which has reached over 100 million tonnes por year. All-out efforts are mocked to utilize this bly ah mail only for environmental comidrentions. beat alot to avoid hand waage for By ach dumping Though there has been a study progress in fly ach utilisation from 1920, as have a king way to go to much the target of 100 per cent fly ach shliration. It is repeated that the apicalford ingreen of posies is around 15 peer con. prom vegetables 13 per cent and meet vegrubles 30 per cent when Page 1 hy ash is mixed with the soil. Toxicity Bals have proved that there is no lovie clement due to fly wok, But it has higher noirlets due to increased mailability of bon and belgium, They fly ath can become a wealth proctor by making set of N for agriculture and producing "given building materials. Prosody, the fly ash utilisation is in the range of 40 million tonnes por year providing employment for over 10,0010 provenel. At the full willration of the emerating wack, than will 1:40,060 million per year.! Allor considering his speech, the to find com mod to diwas the project Couple I think it's a proud lies to mic fly ach to malachire bride. The mibabilitygel by ach, [ peru, will never by a problem. Nearly three-fourths of the imtalked power pontration capacity of India come Som thinmad plants, in 90 per cent of which cod is mad as the primary fixl. As king as cool is wood to powrite bernal pract, the wildud product - fly ink - will continue to by Sharma: Largely, You do in there is a bug havingas painitial The cuma povabout mithed of its digital, primarily dumplog, requires large areas of land On top of that, commonly the hamid prayer plants are poograting 100 mithon tones of fly adjper year in India, and such a manregis quantity is ofowing diffeobles for disposal and in coological minute. According to an cuimake that I read, dumping of fly ash would need 1.020 square kilometres of Land by 2015. Looking at such putrid harands, the central and date governments are trying to cecourage much salts, This could by a good opportunity for us. Think of in, fly ash is available in beige quameaios at a chip mike, The pivemment h mibank what in and there is a huge demand for it, plus we have topriced and contacts in ty cemination sector. What may can anyone want! What do you Bay'twack potential harends, the central and make go 1 4 of 6 initic about it and there is a bage demand for it plas we have The road demand for clay bricks for construction purpose was estimated bo by Ill billion towns that Sarkis. They Live that with an incrown in construction activities, there would be marqually rising how with", witch period a nice market for the wo of chop fly ash is a me bond bowerwhine. On the buds of such preliminary analysis, Shamma decided to set up a plant that would have the capacity Iste Exhibit ). Heves book He back over moder head of paper). By the way, there would be the other operating cepcrocs scinted to the volume of production. Theer in virtually the tes materials, divingry and libga for ruling the final product Oyer wa purded and wanted to cousin my chealy the frability of the project. They rgood te FINAL DECISION mar of 10 par com par an15 of 6 FINAL DECIMON Wal Incident would ood then Kill millie, out of which Re millen would be Ended by the be lunacod, However, investtocuts in the working copied would be recovered in full ERUDIT 1: FLY ASH DRICK MANUFACTURING PROCESS XHINT 2: ESTIMATED INVESTMENT IN INDIAN RUPEES 1 400 308Machinery Z,UUU,UUU Trucks 3,000,000 Payload machine 1,500,000 Authorized for us 8 6 of 6 Total 8,000,000 ors. Page 6 9B13B022 EXHIBIT 3: ROUTINE EXPENSES PER MONTH IN INDIAN RUPEES Building rent 50,000 Administrative cost 10,000 Office supply 5,000 Electricity (for lighting) 10,000 Miscellaneous 20,000 Source: Compiled by authors. EXHIBIT 4: EXPENSES RELATED TO VOLUME OF PRODUCTION PER MONTH IN INDIAN RUPEES (FOR 0.20 MILLION BRICKS) Fly ash 250,000 Gypsum 250,000 Lime 300,000 Sand 40,000 Electricity 10,000 Labour 50,000 Total 900,000 Source: Compiled by authors. Authorized for use only by Shannon Howard in Accounting at University of Fredericton from 7/22/2024 to 9/16/2024. Use outside these parameters is a copyright violation EXHIBIT 5: PERSONNEL COSTS PER MONTH IN INDIAN RUPEES Workers 100,000 Office assistant 20,000 Watchman 15,000 Drivers 25,000 Source: Compiled by authors