INFORMATION TECHNOLOGY STORE PROJECT

1.- THE PRODUCT

The company's objective is not only to sell computer products but to offer a service.
integrated into potential clients regardless of their situation as individuals, SMEs and
including state bodies. For each client, a kind of project would be prepared.
customized according to your economic capabilities, purchase volume, etc. The different
projects could range from the simple sale of computers and peripherals to the
maintenance or installation of a corporate intranet, including the expansion of the park
of computers for a SME. All projects could include hardware products and
software creating for the client a particular study of their needs and looking into the
market the most competitive products. It is also offered as a complement to each project.
a technical-economic study of the positive impact that the purchase of the 'solution' will produce
IT in the structure and operation of the company. Despite the fact that the company would be
basically oriented towards working with SMEs, it would not neglect the individual consumer who
for example, I would like to buy from a computer to a video game console.

The integrated service for companies could even consist of supplying 'solutions
IT services" for an extended period of time offering maintenance, expansion, studies
of new technologies, etc., turning ourselves into a kind of "partner" company.

Although the product itself is not novel, the comprehensive service offered to the client is.
gives to all products a great added value, since many companies sell equipment
they are tech-savvy but then do not provide the appropriate support or maintenance. In addition
in the aspect of technical-economic projects, the company could even behave like
a small consultancy.

2.- POTENTIAL MARKET

Today, computing has been introduced in practically all fields, any type of
the company resorts to it because, although it entails a cost, the benefit obtained from it is
superior in that it facilitates the completion of multiple tasks: from accounting
up to the design and simulation of their products. Currently, the computer and its derivatives do not
can no longer be considered just a tool for work but have become a
appliance most within any home.

The potential market would focus on SMEs located in the Community of Madrid.
companies could be of all kinds, logistics companies, transportation companies, food companies,
services, etc. Of course, potential users who do not
professionals since the Community of Madrid has a high population density
concentrated in urban centers where computing and communication services are found
strongly implanted.

The competition in this sector is very numerous, ranging from small shops to
family business up to large surfaces dedicated to the mass sale of IT products
of consumption. As mentioned in the introduction, the company would be situated in the
market in a middle ground between the two previous conceptions, where competition is
smaller, not taking into account that the comprehensive service as an added value is offered by very few.
companies aside from the previous technical-economic study which would be offered at no cost to the
client.

The large stores dedicated to the sale of computer products (VOBIS, EI System,
computer megastores, MEGADOMUS, etc.) could offer lower prices, but their
total or partial absence of advice, null maintenance, no dedication to SMEs could
to be surpassed by our company in such a way that an individual user could even choose to
buy a product that is somewhat more expensive if I had proper guidance based on your
needs, reliable maintenance, and a possible expansion at a competitive price. The
companies do prefer much more maintenance and a detailed study than for a
very low prices, this last point based on our own experience.

In the detailed project offered to each client, one could enter into direct competition with
some IT consultancies, but by offering this study for free at least in
appearance this competition would be irrelevant.

Possible clients could be found:

Private non-professional customers: Game consoles, home computers, kits of

Internet connection, peripherals, and consumables

Individual professional clients: Specific software (CAD, photo editing,

etc.), peripherals such as plotters, scanners, modems, and high-performance cards,
personal computers.

Family businesses (accounting, balances, stock control, customer database). They are usually
few computers operating independently with generic software packages
for these tasks.

SMEs: Personal computers, servers, workstations, specific devices

for network management (routers, hubs, switches, etc.), specific software for the
network maintenance, etc. A very specific software would be provided for the activity
to which the company is dedicated taking into account the volume of business, number of
workers, etc.

For all these clients, from individuals to medium-sized companies, the...

detailed projects mentioned above.

The distribution channel for products and services would go from the purchase of hardware materials and
software to wholesale distributors, up to sales and after-sales service through
assembly of components, installation of products in the plant (programs, networks, peripherals,
etc.), transport, repair, maintenance, and expansion.

The incursion of new mobile and fixed-line telephone operators (Retevisión, Uni2), of the
data service providers (British Telecom, Cable Europe, France Telecom), of the
Internet service providers (Teleline, Arrakis, Geocities, etc.) are causing a
mass access of non-professional users to resources that were previously exclusive to companies, which
causes a significant increase in the demand for equipment and software adapted to the
needs of new technologies. In addition, small and medium-sized enterprises have
started to realize the short, medium, and long-term benefits that they bring
computer solutions for your businesses (accounting, payroll, resource management, internal flow)
of information, etc.) and to see computing not as a luxury but as something completely necessary
in order to increase its competitiveness.

3.- THE TARGET MARKET

Considering the increasingly higher level of development in the southern area of Madrid, the target market
the company would start in a municipality of that area with a number of inhabitants
sufficiently large to enable the initial growth of the company. The municipality
chosen would be Fuenlabrada due to its excellent communication with the rest of the municipalities of the
area, as well as with the center of the capital (RENFE commuter trains, M- ring road highway)
40, etc.).

It is a core of young working individuals and therefore more sensitive to implantation.

of new technologies. The demographic growth has been very strong in recent
years (helped by the increase in the price of housing in the center of the capital by 20% according to the
IVIMA in the last two years.). The industrial growth of the area is increasing
notably judging by the twelve industrial parks recently created. Due to the
the government's policy to balance the level of development of the municipalities of the CAM has been
strongly invested in infrastructures in the southern area.

As possible competitors in the municipality of Fuenlabrada, it is worth mentioning that there are
approximately a dozen stores dedicated to the sale of computer products although
In very few of them, if any, is a comprehensive customer service offered.
like the one offered by our company. Below is a list of the possible
competing companies:

Siberlan SL. C/British Islands 8. 916080259

Agustín Hurtado Luna

Vobis. C/Alava 15. 916062417

Top System. C/ Nazaret 26. 916098920

Informatics Fuenlabrada SL. Plaza de las Margaritas s/n. 916068105

Autobasic. C/Hungary 3. 916002045

Ofimeca SL. C/Covadonga 20. 916068612

Galicia Service. C/Gerona 2. 916974206

4.- MARKETING

Regarding the way competitors advertise, we have:

Yellow pages.

Local business guides.

 Posters and sponsorships of sporting events.

Posters on urban buses.

Direct advertising in mailboxes.

News diaries (economic pages).

The forms of advertising used by the company would be the same as those used by the rest with a
a small preliminary study of about four weeks with the aim of investing more in those that matter most
be profitable.

As novel forms of advertising (compared to competitors), a ... could be carried out.

electronic mailing and a conventional mailing to the different companies in the industrial zones of the
area as well as to all companies likely to install new computer equipment or
renew and expand the existing ones.

Another interesting form of advertising would be the creation of a webpage on a provider of

services (ISP).

5. LOCATION

Unlike other municipalities in Madrid, in Fuenlabrada there is no street or area

especially dedicated to computing and therefore the location of the different companies and
the stores are somewhat scattered. As a drawback of this type of areas (e.g. C./ Monforte de Lemos
in Madrid), there is a high level of competition, although savings on advertising can be
considerable, as these areas are well known by the general public (and are also considered areas
of 'good prices' or at least 'isocosts', when in many cases this is not the case.

Due to the lack of a specific area for this type of activities, the location of
the project would be in the central area (probably on Leganés street) as it is a street of
great commercial activity in all sectors.

In the graph shown below, marked with a small symbol are the
main stores and companies dedicated to the IT sector in Fuenlabrada. The possible
location appears marked with an arrow.

6. INFRASTRUCTURE COSTS

The infrastructure necessary for the development of commercial activity is based on:

Commercial premises properly equipped with an ISDN line for a possible

connection to some client and of course to get the most out of the network
Internet.

Basic electronic tools and instruments for the assembly and repair of
equipment. As a second option, the repairs of the equipment could be subcontracted
IT professionals like those in other competing companies.

Van for equipment delivery.

 Warehouse for a limited stock that will need to be calculated based on the quality level
of the service to be provided (response speed to incidents, equipment
damaged in maintenance contract, quick installation, etc.)

Since this is a preliminary project, we are not entering figures for the moment as we are
still in search of the best conditions.

PROJECTS

1st Rational analysis of the objectives and means. If from this analysis we believe it is worth it
project.

2nd Plan to carry out in the most efficient way possible.

EFFECTIVENESS -vs- EFFICIENCY

EFFECTIVENESS: It meets the proposed objective

EFFICIENCY: Relationship between achievement and the cost of achievement

INPUT: Everything that must be consumed or used in a manufacturing process or for

obtain a specific objective. Manufacturing input (typical of an industry): raw material,
labor force...

PROFITABILITY: In economics, it relates the income and costs generated by a

company. Greater profitability the greater the difference (Here we talk about income
and strictly monetary costs.

For purely economic issues, the concept of OPPORTUNITY COST is used.

SHADOW PRICES): For any object, there are multiple alternatives for use, "the
cost of each peseta spent on a specific objective", examples:

Medication A Provides a 3% health increase

1 peseta

Medication B gives me a 4% increase in health

It is what is forgone if we chose the other alternative.

The opportunity cost is very volatile, it depends on things like mood. The decision
the criterion is subjective. It is when making decisions that they are used, since all the
Alternatives have a benefit and cost that we must compare.

A project can be divided into 4 stages:

A: Studies: Economic and Planning of the execution

B: infrastructure development

C: Start-up
D: Operation under normal regime

The last three are not part of the project study.

There are projects that do not have these 4 stages. Each project has its own characteristics.
These 4 stages are for industrial projects. Example: in a citizen security project
we skipped the infrastructure phase.

Within the studies are the economic ones: to see if a project is profitable or not; and the
execution planning: includes the rest, thermal plans, program, sequences
execution timelines, resources that can be used.

ECONOMIC:

Are the necessary resources available? There must be a physical study that tells us if it is possible.
oh no (there is enough capital).

Is it profitable? To see whether it is or not, we use the pre-feasibility stage.

FEASIBILITY STAGE: in which a very rough and imprecise assessment is carried out
benefits that the project can provide.

PHYSICAL

MARKET PROFITABILITY

FINANCIAL

The spiral means that it is not known where one should start because everyone influences everyone.
superficially studies all the factors and goes deeper as data is gathered.
Since studies cost money, financiers want to finish as soon as possible, and those who
they study the project, they have more information and more doubts arise. It reaches a
commitment when carrying out the project: the project manager decides. Really, never.
can ensure that the project study is completed.

Example: Integrated circuit factory, (it is assumed that manufacturing is feasible). The big steps of
study of the project would be:

Study the possible alternatives for the manufacturing plant (could start with
any other part, for example the market study). The idea is to start from where
suspects that we will face greater difficulties. They are being studied:

Possible production scales (1000, 10000... chips per month).

Types and quantities of inputs.

Execution times of infrastructure works

Required investment for each alternative

 Prices and quantities of supplies

Accumulated costs until positive cash flow occurs

Operating cost of each alternative

Required supplies

Input prices

Investment
Cost Alternative Total Investment Capital Turnaround
Infrastructure

A 80-95 800-1200 400-500 1200-1700

B 70-53 670-1050 420-250 1040-1610

C 70-85 1500-2000 150-200 1650-2200

This table is created and recreated many times throughout the project's study.

Capital giro: money invested in raw materials, materials, cash... capital no

inverted in physical cases adhered to the ground, but without which it cannot function.

Available capital

Cost of capital according to quantity demanded (interest).

Market:

Estimation of quantities to sell.

Rental price estimation.

NOTE: these phases are cycled (they are repeated like the spiral in the graph and continue)
tuning).

Price of
Market Market Price of conditions of Amount to
sale Total income
Potential Objective market competition to sell
dear
90 units. 45/70 units. 1.2-1.5 mill Perfect. 1.12 million 16-20 units 1600-2400

It must be done for all the alternatives.

Potential market: market that we can reach if we had sufficient resources in the
geographical framework that we focus on.

Target market: (goal to achieve) market that the promotion we will make will reach
product. We will need to know what type of market we are facing. This will influence
prices, strategies, etc.

Market price: it refers to a similar product from the competition.

Competitive conditions: I need to know what type of market we are facing. From there arises
an estimated selling price.

Quantity to sell: with this we can have an idea of the revenues.

This is a possible way, it is not THE possible WAY to approach a project.

FINAL RESULT OF THE PROJECT

YEARS

1 2 ....... N

OPERATIONS 0 0 474

Income 110 26 474

Sales 560 680 186

Total income Op 265

Outputs-Installation 37

Previous studies

Infrastructure

Start-up

Departures - Normal Regimen

Raw Material

Personal

Various

Total Operating Exits.

Net Operating Cash Flow

Net Operating Cash Flow Accumulated

FINANCING

Capital Inflow

Capital Services

Net Financial Flow

Net Accumulated Flow

Total Net Flow

Net Accumulated Flow

670
706
-
-706
670 57
......
-
- -57
1370
670 .....
100
1000
900
----
----

-
900 1000
100
900 1900
......

230 294
 230 624

The important thing is the Net Cash Flow from Operations, which represents the cash (pesetas) that has
stayed during that time.

Capital services are the payments, whether of interest or capital repayment.

If the flow is positive, the scheduling of the project construction begins (if there is
that to build something).

Now let's see if the project is profitable

We must estimate the percentage of the target market that we want to capture, it gives us an idea of how
ambitious of the project. In order to estimate it, we must know the competitive conditions.
of that market: how power is distributed within the target market. It is important to know
If there is a monopoly, if there is one, they will charge high prices and we can compete with prices.
lower. The target market is a subset of the potential market. It is also important
the volume of advertising investment.

For the study:

Input flow

Flow of outputs

Cut-off rate

For each type of project, the minimum phase must be defined. The higher the risk, the higher the rate required.
of court. It is established in relation to the payment of fixed-term deposits set by the banks of
first line. Ex: if I have a 4%, I put in the project 12-20%.

Everything stated in the project and the conclusions must be noted in tables as easily as possible.
possible. This is regarding the quantification of the target market. It is necessary to establish the
criteria and then quantify the target market. These criteria are discretionary for the one who
the project is done, a justification is provided but it is not something numerical, something verifiable. A
study of the potential market, because it is where answers can be obtained. We see how it
Behaves the global market to draw conclusions about our market.

To establish the revenue stream, it is necessary to set the product price, also when it ...
cobra (a hamburger restaurant every day; those who supply the products do not get paid every
days). I will be able to say what income there will be and also the financial operating costs that
they also influence.

Technical operating costs: based on the state of the art and approximate costs.
Also information about the average costs required for most of what we are
manufacturing. From there ! technical process and the scale of the project ! see how much we are going to
produce. Quantify the specific inputs for the scale we have chosen, assess their value and
evaluate the technical costs.
Startup costs: this aspect may or may not be present (it may not be necessary to build)
infrastructure, nor build ships...). If it has to be done, the first thing is the site study.
from the plant, then we will create plans and technical reports that will provide us with the technical report that is
what engineers call a project. (If there is a commissioning stage, there must be a
project, it may or may not include technical operation costs. Example: building, until they give it to you,
cost of electricity...

PROJECT INDEX

Project summary (1 or 2 pages). Fundamental ideas and results of the project (is it or not)
profitable).

CHAPTER 1. THE PRODUCT

We describe the product or service we are interested in. But not something deep because
investors and economists are going to see this.

Benefits from the perspective of the consumer or user.

Description of goods and services.

Description of the product's competitive advantages.

CHAPTER 2. THE POTENTIAL MARKET

2.1. Description and quantification of the potential market. (We can deduce statements
particulars of general statements; the potential market is like a broad vision of
target market). What was seen in the potential market can be applied to our target market.

Degree of ripeness of the product:

At first, the growth is slow, then it skyrockets, and later when it is seen that the
Sales are not going to increase. It's interesting to place our product in one of the 3 areas. Not in
the third when the product is going to disappear.

2.2. Description of the competition time.

If it's a monopoly or a sole buyer, I have no freedom in setting prices and terms of sale,
Then I will have to look at the cost line.

2.3. Distribution of buyers based on relevant variables.

I have to explain and provide information about how the global market is composed. What type of
hobbies, geographical distribution, marital status...

In each case and for each product, describe the variables that may interest us.

2.4. Distribution channels.

Distribution channel: The path the product takes from the factory to arrival.
to the consumer. Describe the normal distribution channel in the global market for the type of
product to sell.

2.5. Market evolution forecasts.

Include the idea of the experts. They assert that the market for this product will grow.

2.6. Description of the common attributes between the potential and target market.

CHAPTER 3. THE TARGET MARKET.

3.1. Description and limits (not only geographical limits).

3.2. Quantification of the target market consumption.

Statistics, public services. These statistics are to know initially in the first way
how the target market behaves regarding the potential; to see if it can be utilized
conclusions of the potential in the objective. If there is agreement, we will be able to use them.

3.3. Competitors in the target market: weaknesses, strengths, and general characteristics.

Sales will be made in the target market, then the fate of the project will depend on that.
target market. Then it is important to know it. Thorough study to see how they behave
competitors...

CHAPTER 4. MARKETING.

4.1. Means that competitors use to promote their products (this point could
to be included in the previous one). We need to quantify how much they spend to estimate how much we have.
what to spend on us.

4.2. Medios de promoción que se planea utilizar: costos anuales

4.3. Distribution channels planned to be used: annual costs. This is achieved by researching.
to the wholesaler and the retailer and how they sell it.

CHAPTER 5. LOCATION.

To decide on the location, several places must be chosen, and the isocost curves must be drawn.

Once the isocost curves are made assuming there are two alternatives, we have: One
isocost curve for each item (raw materials, transportation...). If it can be chosen the
better intersection (in case there are changes).

We need to calculate the total costs for the project horizon: calculation time in the
What we believe is that we can know the outcome of the project. The project does not have to end.
here.

We also have the isochrones that measure the same time it takes to arrive. They are
very irregular. These curves are widely studied by large supermarkets.
Possible alternatives.

Isocost curves.

Infrastructure costs (comparative for each alternative).

CHAPTER 6. INFRASTRUCTURE COST.

Much more detailed than the previous one.

6.1. Description of the infrastructure.

Literary and sketches, the plans in the appendix.

6.2. Synthetic budgets.

Do not put a value on things, but rather have a company guarantee that it will sell it to you at a price.
determined.

CHAPTER 7. OPERATING COSTS UNDER NORMAL REGIME OR COSTS OF

OPERATION.

7.1. Description of productive processes.

7.2. Quantification of inputs.

7.3. Costs of inputs.

7.4. Personnel costs.

7.5. Other costs.

7.6. Estimation of the average cost per unit produced.

Everything is done here with the utmost precision.

CHAPTER 8. RESULT ESTIMATION.

Normal analysis for a period of 5 years, which is a time that can be predicted with some
security. In the total costs differentiate between fixed and variable. There are costs that are a function of
sales ! variables

Others not (e.g., acquisition of a plant, rental...)! fixed.

Break-even analysis: it indicates what the minimum sales amount that must be made is.
to do in order to avoid losses.

Also project profit and loss accounts for the next 5 years.

Perform a sensitivity analysis of the results if changes occur. The results depend
that these assumptions are met, and to know how sensitive those assumptions are or are not to changes.
8.1. Total income from rents.

8.2. Total costs, distinguishing between fixed and variable.

8.3. Analysis of the break-even point.

8.4. Projected income statement for 5 years.

Projected balance for 5 years.

8.6. Sensitivity analysis for assumed changes.

CHAPTER 9. FINANCIAL ANALYSIS.

9.1. Sources and conditions of initial capital.

9.2. Estimation of cash flows (at least for the capital repayment period)
initial).

9.3. Profitability estimation.

9.4. Sensitivity analysis for changes in initial assumptions.

It is important that the sources and initial conditions are favorable.

Cash flow (inflow and outflow of money only) 'profits and losses.

The time is at least the time to repay the initial capital (until the capital is returned
initial investors.

If you anticipate that someone will pay/charge you in installments, I need to set the day that I am going to
collect/pay.

Regarding this cash flow, an analysis of profitability must be done, followed by an analysis of the
changes regarding the initial assumptions.

For the long term, it is annual; for the first 2 or 3 years, is it 'memory'?

CHAPTER 10. ACTIVITY SCHEDULING.

We start from the assumption that I need to make preparations before the launch of the project.
Then I have to take this chapter into account; I have to study all the activities to
to create a diagram of all these and how they develop over time. It's within
from the technical side, but in the annexes I detail everything, activity by activity.

10.1. List of activities and resources.

10.2. activity schedule.

10.3. "network" diagram of activities.

CHAPTER 11. LEGAL ORGANIZATION.

Legal studies, if there are initial patents.

APPENDICES.

Detailed information. Anyone with a university education can understand it. Everything
Anything that exceeds this goes to the appendices. Example: legal appendix, market study...

METHODOLOGY. RULES TO FOLLOW.

Factual assumptions can only be used when there is no available data. The more
assumptions we will have a weaker project. They can be used in limited cases but always with
reinforcements that affect credibility.

The factual assumptions must be explicit and reasoned. I cannot use them implicitly in
a story shares a detail that I haven't explained before. I must say that I assume this and I do it for
such reasons. Indicate the source from which the data comes.

For every data used, the corresponding source must be cited, which can be either personal or.
published. Own if we provide the data. Yes, I can use data that are opinions,
but stating the source.

The methodology used for obtaining data from primary sources must be described.
in detail. (For example: we know the people who are there because we have conducted a census and we have to
explain how the procedure for data collection was, or the mathematical model
followed).

Published data sources must be cited with all the necessary information so that the
The reader should be able to find it. The source chain must be included, for example, in a newspaper.
The census data comes in, you have to provide the newspaper and the type of census. Sometimes it is included in the
bibliography as sources.

The theories used, except for the well-known ones, must be supported with author citation.
discussions about it, with quotes from sources.

The logical chain must be impeccable. The project should be seen as a problem.
mathematician who starts from a series of axioms and leads to a result that is the profitability of the
project, and these must be logically well linked.

FUNDAMENTALS OF ECONOMIC THEORY.

The economic problem arises with scarcity, mechanisms of distinction must be established.
production. Economics studies the behavior of a group with the problems of scarcity and
distinction. It studies it from a statistical point of view, not individual.

Paradigms:

HOMUS ECONOMICUS: every individual always seeks to maximize their benefit.

various alternatives, the one that increases the individual's wealth the most is chosen), and also its
behavior is rational (if he knows two alternatives, he chooses the one that gives him the most wealth).
MARKET: any group of suppliers and demanders of a product that create
to understand the rest of their offers and demands. Types:

Perfect competition: it is fulfilled that: none of those who offer or demand the
product that is traded is sufficiently important to, in itself, alter the
prices of the traded product; and that it be transparent, everyone who trades knows the
prices and qualities of traded products. For example: neighborhood market.

Monopoly: there is a seller that sets the price of the product by itself. E.g.: telecommunications,
Microsoft. Absolute monopolies are rare.

These are two extremes, being able to be at any intermediate point. E.g.: several companies
Airlines set prices among themselves.

PRICE FORMATION:

The quantity demanded decreases when the price increases and vice versa.

There is another graph: as we have more units, the last one gives us less satisfaction: Law
of growth utilization.

Marginal: for each additional unit, satisfaction is lower than the previous ones.

If this is true, for each of us there exists a marginal utility table for each
product.

Each point on the curve represents what Mr. X would be willing to pay for each unit.

For now, we are only studying one individual; we haven't talked about the market yet. If this
we do it for a group of individuals, we obtain another similar curve: aggregate demand.
It is obtained for each price, for the n individuals.

If we move from Qn to Q1!

We will talk about a decrease in the quantity demanded (not a decrease in demand). It appears
when there is a price change.

We will talk about a decrease in demand when the curve shifts.

Supply Curve.

When the price rises, the quantity demanded tends to increase and vice versa.

PRICE FORMATION (overlap of the 2 graphs).

At P1 consumers are willing to buy at Q1, however, suppliers need

sell at that price Q4.

This part does not find a buyer.

In P3, the sellers only offer Q5, but the buyers want Q3. A maximum price is set.
When this happens, there is scarcity; people demand a greater amount than what is available.

At point P, the desires of suppliers and demanders coincide.

The effect of the changes in the lines on the price depends on the elasticities of the curves:

The more horizontal a function is, the more elastic it is.

The more vertical a function is, the more inelastic it is.

Absolute elasticity! parallel to the horizontal axis.

Absolute inelasticity ! parallel to the vertical axis.

ELASTICITY --- PRICE

Q/O

P/P

If the price changes by 1%, what effect does it have on the quantity demanded?

Products of very elastic curves react more strongly.

Products with very inelastic curves are little affected (the demand is not affected by the variation.
of the price).

Examples of elasticity of some products in the USA:

Tomatoes, strongly elastic, 4.6.

Household electric energy, very inelastic, 0.13.

C: Marijuana, 1.5.

D: Cinema, 0.87.

From C and D, it is concluded that cinema is more addictive than marijuana.

To produce, the best market is:

For perfect competition: elastic

Monopolies: inelastic. One can virtually choose the price.

Income elasticity is also measured, which is interesting for launching a product in the market. We
It indicates what we can expect to happen to the quantity demanded in response to changes in income.
of potential buyers. Examples:

car
-0.2

Example: supply and demand for gasoline.

What happens if the government establishes a tax of 10 pts/liter that is collected by the seller (the
gas station.

The gas station (at 100 pts/liter) collects less than 100 pts/liter, so it would like to increase the
price.

The tax is transferred to the buyer, the supply shifts.

The offer aims to transfer all the tax to the demand, (it would achieve this if the latter
outside truth).

It is the breakeven point (a middle ground is reached). Part of the tax is paid by the
gas stations and part of the consumer.

The consumer pays: 107 - 100 = 7 pesetas

The gas station pays: 110 - 107 = 3 pts.

Therefore, how taxes are distributed depends on the elasticities, with:

Energy companies pass on taxes to the consumer, just like gasoline.

Any productive system talks about 3 types of costs:

Total cost = inputs! For each level of production (CTi)

Average cost = CTi/i

Marginal cost = TCi - TC(i-n) ! Cost of the last unit produced

Fixed cost = The cost that does not depend on i

Variable cost = The short one that depends on i

Graphically:

If the fixed cost changed (the need for a new variable):

The average cost is used to make decisions in accounting.

ANALYSIS OF THE BREAK-EVEN POINT:

It is necessary to involve him in the project.

If we project to produce q2 (very close to q1):

 Small benefit

Very close to the losses. If there are estimation errors (we may have it).

How much does it mean to produce one more unit in both revenue and costs?

COST TABLE

Production C. Marg C. Medium

C. Variable Medium
Q CF CV CT CM Come

1 30 3 33 3 33 33

2 30 6 36 3 3 18

3 30 9 39 3 3 13

4 30 12 42 3 3 10.5

5 30 15 45 3 3 9

6 50 18 68 3 23 41.33

7 50 21 71 3 3 10.14

8 50 24 74 3 3 9.25

9 50 27 77 3 3 8.56

10 50 30 80 3 3 8

11 75 33 108 3 23 9.81
12 75 36 111 3 3 9.25

Costs are used to: control inputs; degree of efficiency of the production system
(comparing costs in two periods); to justify prices; justify the prices that are charged
(especially in public services)...

The costs used to make decisions are the marginal costs.

The costs that are calculated are always average costs. They can be used for some things and not for others.
for others.

Distinction of cost utilities:

Historical costs: these are what things cost. For example: a pen 20 pesetas.

Opportunity costs or opportunity value cost: it is the value of what you give up.
One must make sacrifices to obtain a certain amount of cash.

For example: we have a tanker plane and 2 fires. Fire A costs 1,000,000 to put out.
the fire B 1,200,000. We cannot put them out both.

The historical cost of A is 1,000,000; the opportunity cost of A is the losses from not shutting down.
B.

The historical cost of B is 1,200,000; the opportunity cost of B is the losses from not turning off.
A.

The total cost is the sum of the two.

The separation is made because opportunity costs are very difficult to calculate. Moreover,
these costs are always open to opinion (everyone has an opinion). They are never recorded, but they must be
to be taken into account during the project development stage.

Real example:

A nuclear power plant is being built that costs 5 billion dollars. Environmentalists say it is preferable
to build a hydroelectric plant. It is concluded that either nuclear safety is increased with
a $1 billion investment, either the nuclear plant is closed and the hydroelectric plant is built that
It costs 4 thousand million $. The useful life and productive capacity of both plants is similar. The price
The cost per kW is nuclear ! $0.025, and hydroelectric ! $0.018.

Ecologists conclude that it is better to build the hydropower plant since there are 4 thousand compared to 6.
mil. This is false, from that moment on, the investment is from 1 thousand to 4 thousand (marginal costs),
Nuclear is more profitable.

When making decisions, only the marginal costs derived from each one are of interest.
Decision. The analysis must be done without memory of what happened previously.
COST ANALYSIS CASES

Case I:

The company JJ S.A. started a year ago the installation of a plant to produce the product.
"x". So far, it has spent 15 million pesetas, and there are still 5 million left to invest.
millions to finish it. It is estimated that in its useful life, at the end of which its value will be 0, the
the plant could produce 100,000 units of 'x'. If construction is abandoned now, its value
it will be null. Each unit of 'x' requires the consumption of raw materials, energy, and labor.
that is paid per unit produced-- of 600 pesetas.

When the construction of the plant began, the market price of 'x' was 1000 pesetas per
unit, but it has fallen to 750 pesetas per unit, and it is not expected that this price will change.
modifications in the factory's useful life period.

Calculate the average cost that the product 'x' will have when it is manufactured.

Decide whether to finish the construction of the factory or abandon it; in both cases
establish what the minimum price will be from which it would be profitable to continue with its
construction.

Fixed cost = 5 million

Variable cost = 100,000 " 600 = 60,000,000

At the beginning, the price is 1000 pts/unit

Ventas = 100.000 " 750 = 75.000.000

Total cost = 60,000,000 + 20,000,000 = 80,000,000

A: Average cost = 80,000,000 / 100,000 = 800 pts/unit (This is what I would have to sell it for)
to recover it all)

B: Average cost = 65,000,000 / 100,000 = 650 (If I continue, I only count what I lack)

75,000,000 - 65,000,000 = 10,000,000

If I sell at 650 pts/unit, I break even; starting from 651 pts/unit, I begin to recover.
(I would recover everything by selling at 800 pts/unit)

Case II:

"ZZ S.A." is dedicated to refining mining slags, and signed a contract six months ago for
to supply a customer with 1000 units of the product 'w' that is extracted from composite slags
limestones and silicates.

To that end, he rented a new location for 1,200,000, which he paid for in advance, and which he will vacate.
when I have fulfilled the extraction of the 1000 units of "w". The rental contract does not
it provides for its early termination, so that, even if the vessel is vacated before the year,
the company will have to pay the total rent for the entire year.
"ZZ S.A." also purchased and transported the necessary slag to its plant at a price of 5000 pesetas.
per ton.

Some executives would have preferred not to make this purchase and transport until the last.
moment. His argument was that, if for any reason the contract was not resolved, this material
not only would it be completely useless, but it would have to be gotten rid of, and that would mean
a cost of at least 500 pesetas per ton.

Other executives held the opposing position, arguing that obtaining that type of
the material was not easy at all and that, moreover, in the worst case, it would serve to fill certain
low-lying land surrounding the plant, which would otherwise have to be filled with gravel whose
The cost, set up in the plant, would be at least 1900 pesetas per ton.

The cost calculations made by the Accounting Department are as follows:

Average cost per unit "w" produced

Raw material (0.5 tons per production unit) 2500

Fixed cost rent (1200000/1000) 1200

Average unit cost total 3700

{My note: 500 tons are needed}

According to a clause in the contract, the client can propose price modifications according to the
market changes, and the company can either accept them or reject them without any
whichever party has to compensate the other. The originally agreed price was 5100 pesetas for
unit of 'w'.

Variant A)

The client tells us that they cannot pay the initially agreed price of 5100 pesetas, due to
unit, but only 3500.

Variant B)

There has been a new price change; now the customer is not willing to pay us more than 2100.
pts. per unit of 'w'.

Variant C)

A new price adjustment brings it down to 1200 pesetas per unit of 'w'.
In each case, it is requested to decide whether to accept the price revision proposed by the client or to dismiss it.
the contract is resolved.

Variant D)

The engineers have discovered that the acquired material could not be used as filler for the
low lands, due to containing too much clay which reduces stability. Analyze the
changes that this new information introduces in the decisions made.

I do not consider the rental cost because the opportunity cost is zero.

VALUE OF OPPORTUNITY
VALUE DE
DISBURSEMENT
NO D D

VARIANT A

Continue

Monetary income
3,500,000 3,500,000
Expenses 3,500,000
2,500,000 950,000
Do Not Continue

Monetary income

Expenses

1,000,000 2,550,000 3,500,000

2,500,000

VARIANT B 2,100,000 2,100,000 2,100,000

Continue 2,500,000 950,000

Monetary income

Expenses

Do not continue
 Monetary income

Expenses

-400.000 1,150,000 2,100,000

250,000

SOME CLASSES OF COSTS: DEFINITIONS, CALCULATION AND USE

There are various ways to calculate and use costs in the analysis and management of a project.
a company, and although all of them are referred to with the common word "cost", their meaning,
utilization and calculation differ widely.

I.- The cost 'by absorption'. It is the one that analytical accounting normally calculates, and its
The main objective is to establish how each of the resources used has contributed.
in the obtaining of the final product or products.

The underlying idea behind the way to calculate this type of cost is that, if in obtaining
products pl and p2 have used the resource rl (raw material, equipment, labor, etc.)
Then each unit of each of the products pl and p2 must correspond to some part.
of the cost of the input used in its manufacturing, a cost that must be completely distributed or
"absorbed" by the developed production.

An example will help to understand the idea:

Let's suppose that a certain chemical process decomposes the raw material.

used (which costs 1,000 pesetas per kilo) in two different products (p1 and p2) in proportions
belts: 35% of pl and 65% of p2. To carry out the decomposition, electrical energy is needed.
it is obtained for free; there are no other costs

Schematic: Raw material = 1000 pts/kpl: Cost per gram = 0.350 p2: Cost per
gramo = 0,650

As we see in the diagram, the cost of raw material has been distributed between the two.
products in proportion to the quantity obtained from each of them per kilo of Matter
processed raw material. Consequently, the total cost consumed by the common stage is
absorbed (hence the name 'absorption cost') by the produced output.

Our example of one resource and two products can be generalized for n resources and k.
products, the idea remains the same: costs must be assigned to each unit produced
in such a way that they are completely distributed or absorbed.

In this type of cost, what decides whether a certain input is included or not in the calculation of
the cost of one or several products is, exclusively, the technical relationship between the products and the
input. If the input is used for its manufacture, then it is necessarily considered
cost of each of the products, without any other consideration.

The use of this form of cost calculation is governed by two principles.

fundamentals:

a) The sum of the costs of the resources used in the preparation of a certain set of
products must equal the sum of the costs assigned to each of the units
produced from all products.

There is no single and uniform criterion for distributing costs among the
produced units; the texts simply advise that it be "reasonable", "founded", "logical",
etc.

For various reasons that we will not explain here, this is the type of cost that is usually calculated
accounting-wise, and the one used for the explanation or justification of service prices and
products.

II The marginal cost

As we know, this cost measures the increase that occurs in the total cost when the
production goes from n to n+1 units. This concept can be generalized for increments.
from n to n+k units adding simply the clarification "for k units" to the expression
marginal cost

The technical relationship between each input and the final product or products is of no importance, or,
better said, the fact that a certain input is necessary for the production of a
a certain product is a necessary but not sufficient condition for the input to be included
in the equation of its marginal cost.

Why? Because the marginal cost only takes into account the impact of a change in the
production generates on the total cost. Let us remember that, by definition, the marginal cost of
increase production from q to q+k is:

CM(q, q+k) = CT(q+k) - CT(q)

and this equation does not take into account the types of inputs and products, but only the sums of
their costs.

This type of cost responds to what is truly important from the point of view of the
economic management, which are not the technical input-output relations, but the effects of the
production decisions on the final outcome. Therefore, if the manufacturing of a unit
An additional product does not require an additional expense, we must accept that this unit
additional has zero cost

Let's look at an example to better understand this idea:

Let's suppose that in order to increase the production from q-1 meters to q meters of a product
Anyone, we need to hire a new employee (in economic jargon)
"acquire a new unit of labor input"), and that with this new employee we
They could produce not just 1, but 3 meters of product. So the last unit of input
acquired, if only used to produce 1 more meter, generates a "buffer" of two meters of
production. In this case, the unit q (which caused the acquisition of the last unit of
"load" in its marginal cost with all the expenses incurred

for the acquisition of the new unit, while at the marginal cost of the units q+ 1 and
q+2, in case of production, you are charged zero pesetas.

It is clear that there can be a different marginal cost for each unit (or set of
units) produced, and that furthermore this marginal cost depends on circumstantial factors
related to workload, the minimum acquisition units, etc. of each input,
what makes its accounting treatment almost impossible.

The marginal cost is used to make day-to-day decisions of the company or

project, because it allows us to understand the incremental effect of management decisions

about the final results.

III.- Historical cost and opportunity costSo far we have talked about 'cost' assuming
Assuming that the value to be assigned to each unit of input used is the price that is
payment at the time of its acquisition. In other words: that the value we have to
to use when calculating the cost of any of the types seen, is the purchase price of the
used supplies. This is what we will call the cost criterion as 'value or price'
"historical" of the inputs.

However, this way of assigning cost values is not always the best.

adequate. There are others, among which we will examine the one known as 'opportunity costs.'

This cost concept arises from the following reasoning:

At the moment of acquiring a supply, its value, from the company's perspective, has to
be greater than or equal to the price paid (otherwise it would not acquire it).

But once acquired, what is its value to the company? To claim that it remains the cost.
acquisition does not take into account the fact that the value of any asset

It does not depend only on the good itself, but on its relationship with the rest of the goods in the economy.
for example, if we acquire a motherboard for [Link] pesetas to improve the performance of our
computer, and when we go to install it we realize that it doesn't work for us because it isn't
compatible with the rest of the components, how much does that motherboard cost us? If
We are lucky and can return it to the supplier, it will be worth the 20,000 pesetas that we paid.
initially; but if we are not lucky, it will be worth zero, or whatever someone wants to pay us for it,
which will surely be less than 20,000 pesetas. It is very easy to find examples of this type
obsolete computers and programs, out-of-date clothing, technologically outdated machines
aged, etc.)

This illustrates the fact that, once acquired, the value an object has for its buyer.
not always or necessarily equal to the price I pay for it (historical value or cost), but
which depends on how the buyer can use it, and that this value can be greater, equal to, or
less than the historical price paid.

This other value, which depends on the use that can be given to a specific asset in some
determined circumstances (and not the price paid for it), is called "cost of
opportunity
remember the essential idea: that this cost or value does not depend on the object itself, but on the
"opportunity" - that is, the circumstances - in which it is valued.

Consequently, the same good can change its "opportunity cost" so frequently and
notably as the circumstances in which it is judged change, although its nature
physics remains unchanged.

We have two different ways to assign cost values to inputs: historical and
opportunity. In what cases should each be used?

When it comes to explaining or accounting for the use and purpose of financial resources in a
company or project, historical cost must be used.

But when it comes to making management decisions, cost/benefit analyses based on

the historical cost contains an inconsistency that can lead to serious errors, and which consists
in the following: the income that can be obtained from the sale or use of any resource,
are necessarily "opportunistic" in the sense that they depend exclusively on the
circumstances of each moment, and in no way can they be considered fixed once for all
always. In contrast, the historical cost is fixed immovably at the moment of the
purchase of the input in question, and does not take into account the changes in circumstances
occurred since that moment. Therefore, a result calculated by subtracting the historical cost of
a figure of opportunity is something like calculating the number of oranges that we
remaining, subtracting the apples we ate from the pears we bought yesterday.

The final conclusion is that management decisions must be analyzed with a marginal approach.
using opportunity costs when possible (sometimes opportunity values
they simply cannot be determined.

EXAMPLES

Case l

"La Empresa, S.A." has been contracted for the execution of a certain stage of a project, and has
The construction of team X began several months ago.

The data of the problem are as follows:

a) Team X is semi-finished. In its manufacturing, until it reaches the state it is in,

it has been invested 11,000 pesetas.

b) To complete the equipment, an additional 800 pesetas must be invested.

c) The cost of the equipment operator is 3 pesetas per hour.

d) The useful life of the equipment is 100 hours of operation, after which its value
residual is zero

e) The time that team X will have to operate to fulfill the contract is

precisely 100 hours.

f) The original price at which the total work was contracted was 2,500 pesetas.

g) Due to the economic difficulties of the contractor, they wish for the price of the work
be reduced to 1400 pesetas.

Analysis with Absorption Costs:

Investments:

Inverted so far 1.000

Investment to finish 800

Total cost of equipment X 1.800

Calculation of the average cost per hour:

Cost per hour/team (1800/100) 18

Operator cost per hour 3

Total average cost per hour 21

With this type of analysis, the question of whether to continue with the contract accepting the new price
or reject the offer, the answer has to be no, since the total cost

it is 2,100 pesetas. (21 pesetas x 100 hours) and the price that will be charged is 1,400 pesetas, with which
produce a loss of 700 pts. Analysis with marginal cost Costs:

Additional investment to finish 800

Operator 300

Marginal cost of the 100 hours 1.100

Since the marginal income to be received (1,400) is higher than the marginal cost at which
will incur (1.100), the answer to the question of whether to continue with the contract or not must be
affirmative.

Case 2 The company 'J' dedicated to the sale of hardware has an inventory of 500 units of
a certain component that was purchased at 60 pesetas per unit. This component has just been
obsolete due to the appearance of another that replaces it, and which has better features and at a lower cost
price.

The company estimates that the 500 components in inventory will no longer be sellable to anyone.
price.

However, they have made him an offer to acquire the entire stock for 12,000 pesetas.

Analysis using the historical cost criterion;

Income 12,000

Costs (500x60) 30,000

Loss 18,000

Since the operation results in a loss, the decision must be to not carry it out.

Analysis with cost opportunity criterion:

Income 12,000.

Opportunity cost 0.-

Benefit 12,000.
The decision must be to sell, that is, the opposite of what was obtained with the historical cost criterion. Case
For the manufacture of a certain device 'D', the inputs 'z' and 'w' are required. The data with
what is being told is:

a) A total of 100 units of input 'z' have been purchased at 18 pesetas per unit.

b) The input 'w' must be purchased; its price is 7 pesetas per unit

c) Each unit of device 'D' requires one unit of input 'z' and another of input 'w'
but 2 more points of electricity consumption.

d) The price that can be obtained for device 'D' is 26 pesetas per unit.

If it is not used in the production of 'D', the input 'w' can be sold for 8 pesetas per unit.

Marginal analysis at historical cost

Income from the sale of 100 units of 'D' 2,600.

Marginal cost of 100 units of 'D':

electric 200. 2,700.

Result (loss) -100.

Consequently, device 'D' should not be produced. Marginal analysis at cost of

opportunity

Income from the sale of 100 units of 'D' 2,600.

Marginal cost of 100 units of "D":

w
z

-electric 200.- 1,700.

Result (benefit) 900.

As we can see, if instead of historical cost the opportunity cost is used for the calculation of
marginal cost for 100 units, the decision is contrary to the previous one.

PROJECT EVALUATION

There are two ways to calculate interest:

Simple interest: the initially lent capital generates for each passing period
an interest equal to the original capital (C), at the interest rate (i). The interest is constant
because it is calculated for the original capital.

Compound interest: if at time zero C pesetas were lent, the interest at that moment
one is C for the interest rate (i). In the second period, the interest is calculated on C plus
the previous interest. Interests are charged on interests. This is called anatocism and is
forbidden, but it is what banks use.

Simple interest amount: Ms(C,i,n) = C(1+in)

Compound interest amount: Mc(C,i,n) = C(1+i)^n

M.i.c.! If we get C in a zero period, we can ask ourselves how much these C will be.
pesetas of today in a future.

To compare C from different periods, we must bring them all to the same period.

P1 C1, C2, ...... Cn

P2 C1*, C2*, ...... Cn*

The two projects cannot be directly compared.

Moving to the future:

Moving back in time (PRESENT VALUE), the relationship in this case is the inverse:

Example of the tables:

Mc(C,0.05,10) = C X 1.628 (1st column)

Vac(C,0.05,10) = C X 0.6439

Example:

2000 01 02 03 .......n

30 25 40 10 ........11

NET FLOW (bottom row): Net cash result after accounting for income and expenses
Funds are received at the end of the period unless we are told otherwise.

To update the project:

Today: 1/1/99! At the end of 2000, 2 periods:

Other criteria for evaluating and comparing projects:

Benefits in 'n' years: it is used in small companies with small horizons.

Profit rate: Profit / Fun! How much am I going to earn and how much am I going to invest.
It does not take time into account either. It is used in the short term.

Capital recovery time. The best project is the one that recovers in the shortest time.
time the invested capital.

VAN: Net Present Value. It takes into account time (it is what we have spent).

Data on the calculations made in the economic study.

About the sale of computers

We have two types of computers, a basic one and an advanced one. The first one costs us 83,000 pts.
and we sell it for 100,000 points. The second one costs us 105,000 and we sell it for 130,000.

Computer material

These are all types of consumables: ink cartridges, mice, mouse pads, hard drives,
modems, printers, scanners, memory....

CD-ROM

In one day, 35 copies can be made. Each copy is sold for 1000 pts. And we...
10 CDs cost 2000 pts.

Internet and photocopies

Since 2000 points are earned per connection and the photocopies are mainly for use of the
store, I do not include profits in this section.

Distribution

Normal months

March, April, May, July, September, October

We sell: 4 regular computers, 2 advanced ones, 750,000 in consumables, and 2 Play Stations.

Good months

June, November and December

We sell: 12 regular computers, 6 advanced ones, 1,500,000 in consumables, and 10 PlayStations.

Bad months

January, February, August

Vendemos: 2 ordenadores normales, 1 avanzados, 500.000 en consumibles y 1 play station.

DATA ABOUT FUENLABRADA

165,000 inhabitants. With one of the highest population densities in Europe, which means
to say that almost the entire population is young people who want a computer.

A completely new residential neighborhood has currently been built: Loranca Garden City with
25,000 inhabitants.

Next year, the Juan Carlos I University will start being built with degrees such as
Senior Telecommunications Engineer.

The hospital will also begin construction next year.

This year, the largest shopping center in the South Zone has been built: the Shopping Center
Loranca.

The area where the store is located is one of the main ones in Fuenla. In that area there is
many clothing stores above all, therefore it is a street (Leganés Street) where people usually go
Many people to buy. The store street leads to Leganés street.

OTHER THINGS

In sheet 1 are the generals, and in sheet 2 are the opening ones.

I don't include the corporate tax expenses because if I take out 33%, we don't earn a dime.
¿?

I have set it up by months, but it could be removed and only the totals could be displayed.
Each person contributes 500,000 pts as initial capital.

We do not have a store name

I have the advertising and the price lists, but I don't think we will deliver them now, we can
let it be noted that we will include them in the appendices.

1 Euro = 116 pts. (Update it on January 1, 1999)

It is important to note that this data is when we already have a more or less stable clientele.
When opening the store, there's no way these things will be fulfilled.

We have a computer and a PlayStation (with TV) as a sample, in addition to a laptop.

accounting and making invoices, there is also another computer with a CD recorder and it is necessary to
compare repair materials (screwdrivers, pliers, soldering tools....).

It is missing to paint the isocost curves on the map, do it by hand and then we will do it better.

IMPORTANT NOTE ABOUT VAT

Let's see how to do the VAT part.

I buy from a distributor a material for 100 pts plus 16% VAT = 116 pts (16 pts of VAT)

I add a 20% profit without VAT, I sell it for 120 points plus 16% VAT = 140 points.
(20 points of VAT)

What I have to do is pay the difference in VAT to the Tax Agency: 20-16 = 4 points

This is done every three months.

These payments to the Treasury are not included in the expenses, since everything recorded is without VAT, and
Since I neither lose nor gain in this, I haven't put it, but if we don't put it, we have to leave it.
noted.

KNOW THAT THIS FRIDAY THE DRAFT PROJECT MUST BE PRESENTED

UNFORGIVABLY AND MANDATORY.

WE NEED TO FIND A NAME FOR THE STORE

DATA ABOUT THE STORE PROJECT

WHAT NEEDS TO BE DONE TO CONSTITUTE A LIMITED COMPANY

1.- DEPOSIT THE INITIAL CAPITAL OF THE LIMITED COMPANY IN THE BANK AND GO
TO THE CAM, WHICH GIVES YOU A HIGH AND TAKES AWAY 1%.

2.- OBTAIN THE TAX ON ECONOMIC ACTIVITIES (IAE) IN THE

CITY COUNCIL OF FUENLABRADA.

3.- GO TO THE NOTARY WHO REGISTERS THE LIMITED LIABILITY COMPANY

4.- GO TO SOCIAL SECURITY TO REGISTER AS SELF-EMPLOYED.

5.- BUSINESS REGISTRATION IN THE FUENLABRADA CITY COUNCIL.

NOTE: THESE THINGS DO NOT NEED TO BE DONE IN THIS ORDER, THEY CAN BE
DOING EVERYTHING AT ONCE.

SOME DATA ABOUT THE STORE

CONSTITUTION OF THE LIMITED LIABILITY COMPANY

THE COMPANY IS REGISTERED IN THE COMMERCIAL REGISTER AND THEY CHARGE YOU
16.878, ALSO PUBLISHED IN THE BOE AND THEY CHARGE YOU 9,800.

SOCIAL CAPITAL OF 500,000 PTS.

EQUAL SHARES MUST BE MADE FOR EACH PARTNER

TAX ON ECONOMIC ACTIVITIES

WHAT GIVES YOU THE RIGHT TO PERFORM AN ACTIVITY.

ACTIVITIES: SALE OF COMPUTERS, REPAIR OF COMPUTERS AND

COPY OF DATA. ALSO, THE SURFACE AREA OF THE PREMISES MUST BE INDICATED, IN
OUR CASE 40M2 OF PREMISES AND 35M2 OF WAREHOUSE. THE PRICE IS 38633

CORPORATE TAX

WHAT IS PAID FOR HAVING THE BUSINESS. 33% OF THE PROFITS PER YEAR

Opening License

PAY THE TOWN HALL 14,000 AND THEN EVERY YEAR 12,500

Self-employed

31.294 PTS/MONTH PER MEMBER

INSURANCE

SELF-EMPLOYED INSURANCE (THE SS DOES NOT COVER DISABILITIES OF LESS THAN 15 DAYS)
ORBITAS INSURANCE SA. 3200 PTS/MONTH FOR EACH MEMBER.

STORE INSURANCE: ZURICH SPAIN INSURANCE COMPANY. INCLUDES

ROBBERY UP TO 2 MILLION, FIRE, BROKEN WINDOWS. 29392 PTS/YEAR.

ADVERTISING

YELLOW PAGES OF FUENLABRADA: 14.141 FOR A SMALL ADVERTISING

FUENLABRADA SERVICE AGENDA: TELENOR MEDIA SPAIN 79000 PTS.

FUENLABRADA MARKET, 12 EDITIONS A YEAR 148,480.

LEASING OF THE PREMISES

80,000 + VAT MONTHLY. VAT IS PAID EVERY THREE MONTHS DIRECTLY TO

ESTATE. IN ADDITION, A SECURITY DEPOSIT OF 2 MONTHS MUST BE PAID.
SHE WILL PROBABLY NOT BE RETURNED IN THE END.

GENERAL EXPENSES

WATER: 2300 EVERY 4 MONTHS

PHONE REGISTRATION 19.154

PHONE 10,000 PTS/MONTH

LIGHT: 10,000 PTS/MONTH, ALTHOUGH IN SUMMER IT DOUBLES DUE TO THE AIR

AIR CONDITIONED

LIT SIGN: IF THERE IS ALREADY A PREVIOUS INSTALLATION AND YOU ONLY HAVE TO
PUT THE LETTERS, THERE ARE 40,000. IF IT HAS TO BE DONE COMPLETELY, THEY ARE OF
400,000 to 500,000.

ALARM: 30,000 WITH INSTALLATION AND DEVICE. THIS IS MADE WITH ADT
PROSEGUR SECURITY SYSTEMS S.A. AND ALSO PAYS 7336
BIMONTHLY.

PAINTING THE FACADE 68000

ROYMAR ADVISORS 20,000 PTS/MONTH

NEIGHBORHOOD COMMUNITY 1000 PTS/MONTH

FURNITURE

PHONE/FAX 4500

FOTOCOPIADORA: DE SEGUNDA MANO 140.000, NUEVA400.000

AN IDEA. EXPRESS ALL DATA ALSO IN EUROS

THE DATA THAT PAINT, SURE.... I SEARCH FOR IT ON THE PAGES

YELLOWS FROM FUENLABRADA AND WE PLACE THEM ON THE GLUE.

I ALSO HAVE A LIST OF DISTRIBUTORS WITH THEIR PRICES.

LOOK TO SEE IF YOU HAVE ANY QUESTIONS TO ASK.

Secondhand Ads:

FUENLABRADA, Avda. Las

Regions, local 60 m², for

sewing workshop, office,

etc. 2nd floor. 60,000 pts.

916 15 83 25

FUENLABRADA, Estoril St.

Local 100 m2, double height,

ideal for small business

(plumbing, warehouse, etc).

135,000 points including VAT.

916 93 30 62

FUENLABRADA, c/ Móstoles.

2 Warehouses, 24-hour surveillance,

gardens, services, from

35,000 pts. expenses

community included in the price.

916 16 80 62

FUENLABRADA, New

Versailles. Local-garage

storage room, with direct access

for people and vehicles

from the street, 27 m², 25,000

points plus VAT.

916 89 24 71
Todos :

FUENLABRADA, Avda. Las

Regions, local 60 m², for

sewing workshop, office

etc. 2nd floor. 60,000 pts.

916 15 83 25

FUENLABRADA, street

Czechoslovakia, 52 m².

Phone: 915 51 64 66.

FUENLABRADA, Estoril St.

Local 100 m2, double height,

ideal for small business

(plumbing, warehouse, etc.)

135,000 points including VAT.

Phone: 916 93 30 62.

FUENLABRADA, c/ Móstoles.

2 Warehouses, 24-hour surveillance,

gardens, services, from

35,000 pts. expenses

community included in the price.

Phone: 916 16 80 62.

FUENLABRADA, Road to
Moraleja de Enmedio. 300

m², 1st floor, open plan,

facade to the road, entrance

independent on the ground floor

parking

Phone: 917 30 58 86.

Phone: 670 52 79 93

FUENLABRADA, New

Versailles. Local-garage

storage room, with direct access

for people and vehicles

from the street, 27 m², 25,000

points plus VAT.

Phone: 916 89 24 71.

FUENLABRADA, square

Santander. Local 170 m2,

any business.

916 04 15 51

FUENLABRADA. Griñón Street,

next to the House of Culture.

Commercial premises.

Phone: 916 09 80 77.

Some things of mine :

PROJECT

COMPUTER STORE

Project Summary

THE PRODUCT.

Sell computers, monitors, modems (Internet), printers/scanners, sound/video cards,

applications/games.

Advantages over competitors: we assemble the computers ourselves, we can deliver the
home delivery or companies, technical support (LAN installation, etc.)

2. POTENTIAL MARKET.

2.1: Description and quantification of the potential market: From any type of company to
individuals. The potential market would focus on individual customers. Find out about residents in
Fuenlabrada and generally the southern area of Madrid, talking about established companies (industrial parks,
factories, etc.).

2.2 Description of the type of competition: It is not a monopoly at all, there are large stores (
say the most famous), talk about how many stores exist in Fuenlabrada, etc.

2.3 Distribution of buyers based on relevant variables: product intended for

professionals, families with studying children, etc.

2.4 Distribution channels: We would buy components directly from suppliers (board
We would mount it in the store and serve the customer directly in the
store or installation at home/company.

2.5 Market evolution forecast: the market will grow, new technologies, progress
progressive internet in households, etc.

2.6 Description of the common attributes between the potential market and the target.

3. THE TARGET MARKET

Basically clients in the Fuenlabrada area.

3.2 Quantification of the target market consumption.

3.3 Competitors in the target market. Discuss the competition (number of stores), services that
they offer, etc.

4. MARKETING

4.1 Means used by competitors, quantify how much they spend.

4.2 Promotional media planned to be used, annual costs. Advertising in mailboxes,

advertisements in Segundamano, El Pais, Yellow Pages, etc.
4.3 Distribution channels, annual costs

5. LOCATION

Invent locations in Fuenlabrada and draw isocost curves, evaluate where the competition is.
and choose an area.

6. INFRASTRUCTURE COSTS.

6.1 Description of infrastructure: rental space, conditioning of the premises (showcase,

painting, high light/telephone/water), purchase furniture.

6.2 Synthetic budgets: create a budget for a company.

7. OPERATING COSTS UNDER NORMAL OPERATING REGIME

7.1 Description of the production process.

7.2 Quantification of inputs:

7.3 Input costs:

7.4 Personnel costs. 1 person attending and another assembling PCs.

7.5 Other Costs: rent, electricity, phone, water.

7.6 Average cost per unit produced.

LIST OF COMPANIES

Notary

Jose Cuadros Ordoñez

City Hall

Plaza España 1. 6929595

Insurance

Seguros orbitas SA. C/ Manzana 7. Getafe. 916822612

Zurich Insurance. C/Leganés 16. 916907211

Ocaso seguros. C/ Zaragoza 3. 6909911

Mapfre. C/ Leganés 2. 6151609

Security

Prosegur. C/Pajaritos 24. Madrid. 915898131

T.P.S. Security. C/Francisco Javier Sauquillo 33. Central Office Building B. 6150100

Seblite S.L. With Getafe 31, Codein Industrial Park. 6977926

Bright

Reylux. Vitoria 1. 6061028

Sirolux. Castilla la nueva 35 local 3. 6976553

Tecnialux S.L. New Calahorros Pol. 606314

Painters

Rainbow. Fromista 2. 6151076

The painter's shop. Nazaret 18. 6069224

Arrabal. Panticosa Square 5. 6975151

Photocopiers

Copyfax Mita. Pool 3. 6083508

Telephony

Telyco Fuenlabrada. Avd España 10. 6907523

Telyred. Avd Hispanidad 11. 6970494

Dematel SL. Pontevedra Plaza 1. 6081061

Locales

Avenue of the Regions, local 60m2. 2nd floor. 60,000 pts.

Lorea II, 76m2 completely renovated premises with showcases and closures.

C/Fco Javier Sauquillo. 145m2, water, electricity, shower. 100,000 pesetas

Furniture

Mateos furniture. Leganes 6. 6904944

Star Mobel. Móstoles 25. 6070525

Computer stores

Siberlan SL. C/British Islands 8. 916080259

 Agustín Hurtado Luna

To you. C/Alava 15. 916062417

Top System. C/ Nazaret 26. 916098920

Informatics Fuenlabrada SL. Plaza de las Margaritas s/n. 916068105

Autobasic. C/Hungary 3. 916002045

Ofimeca SL. C/Covadonga 20. 916068612

Galicia Service. C/Gerona 2. 916974206

Boom Computer. C/Leganes 57. 916978612

CE Europa PC's. States Avenue 7. 916976713

Multidisk. C/Francisco Javier Sauquillo 30. 916064298

On Punto4. Avd Portugal 33. 916079998

Polygons

12 polygons Highlight Cobo Calleja with more than 1,000 warehouses, making it one of the largest in Europe.

PROJECT

COMPUTER STORE

Project summary

THE PRODUCT.

Sell computers, monitors, modems (Internet), printers/scanners, sound/video cards,

applications/games.

Advantages over competitors: we assemble the computers ourselves, we can serve the
home delivery or companies, technical support (installation of LANs, etc.)

2. POTENTIAL MARKET.

2.1: Description and quantification of the potential market: From any type of company to
individuals. The potential market would focus on individual customers. Find out about residents in
Fuenlabrada and generally the southern area of Madrid, talking about established companies (industrial estates,
factories, etc.).

2.2 Description of the type of competition: It is not a monopoly at all, there are large stores.
to mention the most famous ones), to talk about how many stores exist in Fuenlabrada, etc.
2.3 Distribution of buyers based on relevant variables: product intended for
professionals, families with studying children, etc.

2.4 Distribution Channels: We would purchase components directly from suppliers (board
drive, hard disk, etc.), we would mount it in the store and serve the customer directly at the
store or installation at home/company.

2.5 Market evolution forecast: the market will grow, new technologies, advancement
progressive internet in homes, etc.

2.6 Description of the common attributes between the potential market and the target.

3. THE TARGET MARKET

3.1 Description. Basically clients in the Fuenlabrada area.

3.2 Quantification of target market consumption.

3.3 Competitors in the target market. Talk about the competition (number of stores), services that
offer, etc.

4. MARKETING

4.1 Means used by competitors, quantify how much they spend.

4.2 Promotion methods planned to be used, annual costs. Advertising in mailboxes,

ads in Segundamano, El Pais, etc.

4.3 Distribution channels, annual costs

5. LOCATION

Inventing locations in Fuenlabrada and drawing isocost curves, assessing where the competition is.
and choose area.

6. INFRASTRUCTURE COSTS.

6.1 Description of infrastructure: rental premises, conditioning of the premises (showcase,

painting, high light/phone/water), purchase furniture.

6.2 Synthetic budgets: invent a budget for a company.

7. OPERATING COSTS UNDER NORMAL OPERATION REGIME

7.1 Description of the production process.

7.2 Quantification of inputs:

7.3 Costs of inputs:

7.4 Personnel Costs. 1 person assisting and another assembling PCs.

7.5 Other Costs: rent, electricity, phone, water.

7.6 Average cost per unit produced.

Projects