SINGH KULJEET PROJECT 1 ACC4100 Project Cost Management and Finance

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Algonquin College *

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4100

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Accounting

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Jan 9, 2024

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ACC4100 PROJECT COST MANAGEMENT AND FINANCE PROJECT ASSIGNMENT -PART 1 SUBMITTED BY – KULJEET SINGH (041123680) SUBMITTED TO – MOHD AMANSIDDIQUI DATE - OCT/13/2023

Table of contents 1 S .no Topic name Page no 1. Introduction 2 2. Project name 2 3. Business case 2-4 4. Project selection submission 4-7 5. Cost estimate 8 6. Summary 9 7. Reference 10

1) Introduction: - The project I have selected focuses on livestock farm project planning. The project is about rabbit farming, to achieve sustainable and profitable livestock production. The estimated time for this project will be approximately 1 year starting with 50 rabbits. The report will cover various aspects of the project, including its business case, project cost, financial benefits, project selection submission, cost estimates, and a summary. 2) Project name: - The project is titled "Livestock Farm Project Planning: integrating rabbit farming." 3) Business case: - I. Value of the project: The livestock farm project planning project holds significant value for the organization It contributes to fresh food production, which is essential for meeting market demand and food security. Additionally, it supports the local economy by creating employment opportunities for local people and providing high-quality, locally sourced meat and other products to the people. (Pieper, 2019) II. Project cost The initial cost of the project is estimated at $100,000. This cost includes expenses related to purchasing livestock, constructing housing facilities, purchasing equipment and feed, and covering initial operational expenses. III. Financial benefit and revenue: The project's financial benefit primarily comes from the sale of livestock and associated products. It is expected that the project will generate revenue of approximately $84,000 per year from the sale of rabbit offspring and approximately $100,000 from manure/year. In total, the annual sales revenue is projected to be $184000. 2

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Species Production per year Purchasing ($) Sale ($) Total revenue ($) Rabbit (50rabbits) 48-60 *50=2400- 3000 offspring 10$-35$/ head*50=50 0 to1750$ Babies - $35/head= 35*2400= 84000 Manure/year= 1ton /rabbit=5000lbs 5000*20=100,00 0 84000+100,000=184,000 IV. Financial measures: The project's financial measures include return on investment (ROI) and payback period. The ROI is calculated as follows: Roi = (net profit / project cost) * 100 Roi = (184,000 - $100,000) / $100,000) * 100 Roi =84% Payback period: the payback period represents the time it takes to recoup the initial investment. Payback period = initial investment / annual cash flow Payback period = $100,000 / $115,298 = 0.867 years With an annual net profit of $115,298 the payback period would be approximately 0.867years which is roughly 10.4 months V. Justification for financial return: The project's ROI of 84% and a relatively short payback period of approximately 10.4 months demonstrates its financial viability. These financial metrics indicate that the project is expected to generate a substantial return on the initial investment, making it an attractive opportunity. VI. Alignment with organizational objectives: The project "Livestock Farm Project Planning: Integrating Rabbit Farming" is beneficial to both the organization and the person. It promotes sustainability and 3

upholds the organization's reputation while supporting food production, economic stability, and job development. The initiative provides an 84% return on investment and a 10.4-month payback period, allowing the organization to explore profitable possibilities. On a personal level, it demonstrates the individual's entrepreneurial drive by attaining financial growth through high ROI and supporting environmentally friendly agricultural practices. The initiative also benefits the local economy, which corresponds to the individual's purpose of community engagement. Overall, this project is a good fit for both the organization and me, since it contributes to food production, economic growth, sustainability, and community participation while also assuring financial viability. 4) Project selection submission: Project criteria- 1. Duration: the project should have a minimum duration of at least 1year to ensure that it allows for comprehensive planning, execution, and evaluation. 2. Budget: the project budget is estimated to be $100,000. This budget is within the range specified by the company's project selection criteria, which is $100,000 to $1,000,000. 3. Resources: to successfully execute the "livestock farm project planning: integrating rabbit farming," the project will require the following key resources:  Farm workers: skilled and unskilled labor for daily farm operations, including feeding, cleaning, and animal care.  2. Veterinarians: veterinary professionals for the health and well-being of the rabbits and disease prevention.  3. Suppliers: providers of rabbit feed, equipment, and construction materials for the farm's infrastructure.  4. Administrative staff: personnel for record-keeping, administrative tasks, and project management.  5. Equipment: essential farming equipment, such as cages, feeders, waterers, and tools.  6 Capital: Enough funds to pay early project costs, such as rabbit purchases and building charges.  7 Marketing and Sales Team: Professionals that advertise and market rabbit goods as well as maintain client connections, all of which contribute to income generating. 4

4. Stakeholders: the project involves more than 6 stakeholders, including investors, local community members, agricultural authorities, suppliers, and potential customers. Engaging with a diverse group of stakeholders is essential for the project's success. 1. Investors: financial contributors who provide the initial project funding. 2. Local community members: residents in the community who may benefit from the farm's products and employment opportunities. 3. Agricultural authorities: regulatory bodies responsible for overseeing and ensuring compliance with agricultural and animal welfare standards. 4. Suppliers: providers of necessary resources, such as feed and equipment. 5. Customers: individuals or organizations interested in purchasing rabbit meat and manure products. 6. Project management team: personnel responsible for planning, execution, and monitoring of the project's progress. 7. Environmental organizations: Stakeholders concerned with the project's long-term viability and environmental effect, pushing for eco-friendly and ethical farming practices. 8. Local schools and educational institutions: Educational possibilities and collaborations with the farm may benefit these stakeholders by fostering an understanding about agriculture, animal husbandry, and sustainability. Finally, in terms of project time, money, resources, and stakeholders, the "Livestock Farm Project Planning: Integrating Rabbit Farming" project matches with the company's project selection criteria. These factors were carefully reviewed to verify the project's success potential and compatibility with the company's aims and objectives. I. Comparison with alternative project: An alternative project with which I will be comparing my project "livestock farm project planning: integrating rabbit farming." involves aquaponic farming. Alternative project : aquaponics farming Project description: The aquaponics farming project involves the cultivation of crops in a symbiotic system where fish waste provides essential nutrients for plant growth. This project aligns with the concept of sustainable and efficient agriculture by reducing water usage and producing both fish and crops. 5

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Financial details: 1. Project cost: Total investment costs for aquaponics farming can vary, with reported figures ranging from $58,760 to $1,020,536, depending on the scale of the operation. 2. Revenue: Annual net returns (a measure of estimated annual profit) for smaller-scale aquaponics systems have been reported in the range of $4,222 to $30,761. Large-scale systems achieved annual net returns ranging from annual losses of over $11,000 to a profit of $278,038. (engle & beem, 2017) 3. Financial metrics: Rates of return on investment (IRR and MIRR) in aquaponics farming ranged from 0 percent to 27 percent. (engle & beem, 2017) Non-financial factors:  Sustainability : aquaponics is known for its sustainable agriculture practices by reducing water usage and utilizing a closed-loop system, thus conserving resources.  2. Efficiency: aquaponics allows efficient nutrient utilization, as fish waste provides nutrients for plant growth, creating a symbiotic ecosystem.  3. Local food production: aquaponics systems can be established in various locations, contributing to local food production and potentially reducing the carbon footprint associated with food transport. (engle & beem, 2017) II - Comparison with rabbit farming:  Project focus: Rabbit farming: focuses on livestock production, specifically breeding and selling rabbits for meat and manure. Aquaponics farming: centers around the cultivation of crops and fish in a symbiotic system, promoting sustainability and efficient resource utilization.  Economic feasibility: Rabbit farming demonstrates an ROI of 84% and a payback period of approximately 10.4 months, showing strong financial feasibility. Aquaponics farming's economic feasibility can vary widely depending on the scale and specific characteristics of the operation, with (IRR and MIRR) ranging from 0 to 27 percent. 6

 Initial investment: Rabbit farming: requires an initial investment of $100,000. Aquaponics farming: the initial investment can vary depending on the size and scope of the aquaponics system.  Resources: Rabbit farming requires resources such as farm workers, veterinarians, and support staff. Aquaponics farming has different resources, including aquaculture expertise and knowledge of hydroponic crop cultivation.  Stakeholders: Rabbit farming involves stakeholders such as investors, local community members, and potential customers. Aquaponics farming may attract stakeholders interested in sustainable agriculture, local food production, and efficient resource utilization.  Non-financial factors: Rabbit farming primarily focuses on livestock production. Aquaponics farming emphasizes sustainability, efficient nutrient recycling, and local food production.  Market and product: Rabbit farming produces rabbit meat and manure. Aquaponics farming yields both fish and crops, potentially including vegetables and herbs for local markets and restaurants.  Location and context: Rabbit farming may be created in a variety of sites that have appropriate acreage and rabbit- raising facilities. Depending on the availability of sufficient resources, aquaponics farming may be established in a variety of locations, both urban and rural. 7

5) Cost estimate: Cost estimate for rabbit farming project: Categories of costs: 1. rabbit purchasing costs: Cost-: This category includes expenses related to acquiring the initial rabbits for the project, considering the number of rabbits and the cost per rabbit. examples: purchasing cost: $500 - $1,750 (50 rabbits * $10 - $35 per head) revenue from the sale of offspring: $84,000 (2400 - 3000 offspring * $35/head) (“Rabbit in Ontario - Kijiji Canada,” n.d.) ( Family Farm Livestock )  Purchase source: local farm, KIJIJI 2. manure production costs: cost: This category involves the expenses associated with collecting, storing, and utilizing the rabbit manure. The value is based on the quantity of manure produced and its market value. example: manure value: $100,000 (50 tons * 2,000 lbs./ton * $2/lb. 3. livestock care and operational expenses : cost: these costs include expenses for maintaining the rabbits, their living conditions, and overall farm operations, such as feed, bedding, veterinary care, housing supplies, and labor. example:  feed/bedding costs: $10,000  housing supplies: $5,000  veterinary expenses: $1,000  maintenance/workers' expenses: $50,952  (“Rabbit Feed in Ontario - Kijiji Canada,” n.d.)  (“Great Value Rabbit Food - 4kg | Walmart Canada,” n.d.)  (“Bedding and Litter | Rabbit Welfare Association &Amp; Fund (RWAF),” 2023) 8

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The idea of the cost is taken from online sources such as Kijiji, amazon, Walmart, and local farms as well as from personal experience. 6)Summary: In this project, I've selected rabbit farming as a one-year venture starting with 50 rabbits, focusing on sustainable and profitable livestock production. The project, titled 'Livestock Farm Project Planning: Integrating Rabbit Farming,' holds considerable value. It contributes to food production, enhances food security, generates local employment, and offers high-quality, locally sourced meat and products. The estimated initial cost is $100,000, but it's financially robust, with a projected annual revenue of $184,000 from selling rabbit offspring and manure. The return on investment (ROI) stands at 84%, with a rapid payback period of approximately 10.4 months, illustrating its financial potential. This initiative is consistent with organizational goals such as food security, local economic growth, and sustainability. It also fits my aspirations, displaying my entrepreneurial drive and desire to be involved in the community. The assignment also includes a comparison with another aquaponics farming operation. The expense estimates are provided to give a complete picture of the rabbit farming concept. Overall, this endeavor is beneficial to both the organization and me." 9

7)References – Bedding and litter | Rabbit Welfare Association & Fund (RWAF). (2023, August 21). Retrieved from https://rabbitwelfare.co.uk/bedding-and-litter/ Breeder, N. Z. R. (2022, September 14). New Zealand Rabbit Breed (Colors, Lifespan & Pictures). Retrieved from https://www.newzealandrabbitclub.net/ Engle, & beem. (2017, march 1). Economics of aquaponics - Oklahoma state university. Retrieved october 13, 2023, from https://extension.okstate.edu/fact-sheets/economics-of- aquaponics.html Family Farm Livestock (2022 ) https://familyfarmlivestock.com/why-is-rabbit-meat-so- expensive/ Forti-Diet Pro Health Kaytee Rabbit Food for Adult Rabbit, 10-Pound : Amazon.ca: Pet Supplies. (n.d.). Retrieved from https://www.amazon.ca/Forti-Diet-Pro-Health-Kaytee-10- Pound/dp/B001USEYOY/ref=asc_df_B001USEYOY/?tag=googleshopc0c- 20&linkCode=df0&hvadid=292957386144&hvpos=&hvnetw=g&hvrand=845555377448176 9493&hvpone=&hvptwo=&hvqmt=&hvdev=c&hvdvcmdl=&hvlocint=&hvlocphy=9000838 &hvtargid=pla-299161015816&th=1 Great Value Rabbit Food - 4kg | Walmart Canada. (n.d.). Retrieved from https://www.walmart.ca/en/ip/great-value-rabbit-food-4kg/6000001838574? skuId=10043218&offerId=10043218&region_id=202200&utm_medium=paid_search&utm_ source=google&utm_campaign=always_on&cmpid=SEM_CA_331_X8EXNSNF9K_717000 00100970122_58700008076270215&utm_id=SEM_CA_331_X8EXNSNF9K_71700000100 970122_58700008076270215&gclid=CjwKCAiAvK2bBhB8EiwAZUbP1D9OMfdyycS1md cP4uGC2n9KAx3siWLadktOEhV21OIclpaAVIEMhBoCCJgQAvD_BwE&gclsrc=aw.ds Pieper, A. (2019, September 15). Raising Rabbits for Profit: 7 Ways to Make Extra Money with Rabbits. Retrieved from https://morningchores.com/raising-rabbits-for-profit/ rabbit in Ontario - Kijiji Canada. (n.d.). Retrieved from https://www.kijiji.ca/b-ontario/rabbit/k0l9004?dc=true rabbit feed in Ontario - Kijiji Canada. (n.d.). Retrieved from https://www.kijiji.ca/b-ontario/rabbit-feed/k0l9004 10