Kingfisher School of Business and Finance IGNITE DRAGON FRUIT FARMI. Executive SummaryIgnite Dragon Fruit Farm is an agricultural business engaged in growing and distributing organic dragon fruit to export traders and to institutional markets located within the borders of Pangasinan and in some nearby provinces. With the existing shortage in supply of the product, the company will be establishing a 3-hectare farm located in San Pascual, Burgos, Pangasinan wherein the plants will be grown using the most efficient and effective methods and techniques that are consistent with the requirements of The Philippine Organic Act of 1902. Cuttings will be used to propagate dragon fruits during the years of expansion and artificial lights will be applied during the nights of December to April to enable flowering of the plant and harvesting during off-season. Two kinds of dragon fruit will be planted in the farm namely Pitaya Roja and Pitaya Amarilla. Although there are three main varieties of the fruit, only the two will be planted because of their popularity to consumers yet lesser supply in the market. In marketing aspects, Ignite Dragon Fruit Farm will be promoting its product through farm tours and social websites wherein the company will be sharing knowledge and information about dragon fruits. In the farm tours, seminars and on-field experience will be given to the visitors that will increase the peoples knowledge about dragon fruit. While in social websites, the company will be able to answer the questions of interested parties regarding dragon fruit industry. The company will be segmenting its market into global or international and local market. Export traders will be supplied to enter the global market for the fruit while institutional markets such as malls and supermarkets will be targeted in the local market. Currently, the periodic demand of traders and institutional markets significantly exceeds the production yield of the country calling for more growers of dragon fruit. The weekly demand of the traders for dragon fruit of Refmad Dragon Fruit Farm, which is the countrys leading dragon fruit producer with 13-hectare farm, averages 300 metric tons or 300,000 kg per week but only 5 metric tons or 5,000 kg per week is being met by the said farm. For the first five years of operation, the total sales and net income of Ignite Dragon Fruit Farm amounts to, PhP 34,420,054.4 and PhP 20,003,151.3, respectively. These amounts shows that for these five years of operation, the business is highly profitable and engaging in dragon fruit farming is undeniably feasible. Ignite Dragon Fruit Farm will aid in stabilizing and supporting the growth of the industry to satisfy the needs of the dragon fruit market.

II. IntroductionA. General Concept of BusinessNowadays, consumers are becoming more conscious about their health and body leading to people becoming more sensitive and discriminating in picking the foods they eat. This change in the behavior of the society expands the market for healthy and nutritious foods and beverages. One of the industrys growing products is the dragon fruit which is said to be highly nutritious and beneficial to consumers. Many people worldwide love this fruit especially in Asian countries.Dragon fruit farming is the new money-crop according to the Department of Agriculture Bureau of Agricultural Research (DA-BAR). According to the study of Mariano Marcos State University (MMSU) in Ilocos Norte, a hectare of dragon fruit farm can earn an accumulated net income of PhP 2.5 M in its first four years using a PhP 80 price per kg. Despite this highly promising feature of the industry, the growth is still slow taking seven years to triple the total number of farm with 37.7 hectares during 2007 to more than 100 hectares as of this year.Here in Pangasinan, the products supply is still very limited despite the high market demand. This may be due to the plants seasonal harvesting characteristic and the few dragon fruit growers in the province. In response to the current markets needs, our company is studying various factors that will help in forming our Ignite Dragon Fruit Farm. Ignite Dragon Fruit Farm will be located at San Pascual, Burgos, Pangasinan where dragon fruits will be grown using the most effective and efficient methods and techniques of growing the fruit that are consistent with the requirements of The Philippine Organic Act of 1902. This includes the artificial lighting of the fruit during night which will improve the production of dragon fruit and will even make the plant flower during off-seasons and the usage of organic fertilizers instead of chemical-based fertilizers. The Dragon fruit farm will be growing two main types of dragon fruit namely Pitaya Roja and Pitaya Amarilla. In the farm, a total of 2 hectares out of the 3-hectare farm will be planted with the Pitaya Roja and the remaining will be planted with the Pitaya Amarilla. Ignite Dragon Fruit Farm will be entering both the local and international market for dragon fruit. Regarding product distribution to local market, the company will be targeting different malls and supermarkets within the borders of Pangasinan and in some nearby provinces. Malls and supermarkets are where most middle and upper class people, in terms of wealth, buy their foods and things thats why we are targeting this establishments as our main customers in the local market. The company will be supplying traders who are engaged in exporting the fruit. The company will enter the global market because of the greater and bigger market for the fruit. Usually, dragon fruit farms and plantations sell their product to traders because of the more favorable and attractive terms in the global market.Ignite Dragon Fruit Farm will also be available for visit and tours to those who are interested in learning about dragon fruits and its production techniques. In the farm tours, we will orient the visitors about the history of the dragon fruit, the proper growing techniques, its health benefits, and the processed products that can be made out of the fruit like wines, jams and ice creams. We will also bring the visitors to the actual plantation of the fruit and if possible let them have experience in planting dragon fruit and harvesting its fruits.

B. Product DescriptionOur Product Dragon fruit is a healthy fruit and contains various nutrients coming from a cactus plant. Dragon fruits which are usually red in color, although some types of dragon fruit are yellow and pink, are scaly and thin skinned fruit with flesh full of small black seeds like strawberries. Dragon Fruit comes in three major types and are shown as following:

Figure 2.2.1 Hylocereusundatus(Pitaya blanca) has red-skinned fruit with white flesh. This is the most common dragon fruit.

Figure 2.2.2 Hylocereuscostaricensis(Pitaya roja) has red-skinned fruit with red flesh.

Figure 2.2.3 Hylocereusmegalanthus(Pitaya amarilla) has yellow-skinned fruit with white flesh. This said to be the sweetest pitaya.

Ignite Dragon Fruit Farm will be growing organic Pitaya Roja and Pitaya Amarilla. Our farm will not be growing Pitaya Blanca, which is the least sweet dragon fruit, because this is the most common of its kind which means this kind of dragon fruit supplies larger percentage than others in the market. Also, our company wants to maximize the production of the two latter types of the fruit because of its better taste yet lesser availability in the market especially the yellow dragon fruit. Growing dragon fruit using organic fertilizers makes the product healthier and avoid having chemical contents present from dragon fruit grown using chemical-based fertilizers.

Life SpanDragon fruit farming is said to be the new money crop. One reason is the plants long life span. The dragon fruit plant can last up to 50 years with low cost of maintenance giving high income to growers. During this life of the fruit the average annual yield per hectare is 20 - 25 metric tons or 20,000 25,000 kg per year. But for computing the annual depreciation of the dragon fruit we will be using 20 years which is the average life of a dragon fruit plant.

Product Pricing and other services offeredOur product will be priced to targeted customers at PhP 100 during the plants harvesting season and PhP 120 during off-season for the Pitaya Roja. For Pitaya Amarilla, PhP 110 and PhP 130 will be quoted during regular and off-season, respectively. Thus, we will be supplying the market at prices also depending on the availability of supply and the markets demand and other changes in the market.Ignite Dragon Fruit Farm will be available for visit and tours to those who are interested to learn about dragon fruits and its growing techniques. We will orient the visitors about the history of the dragon fruit, different types of the fruit, the proper growing techniques, its health benefits, and the processed products that can be made out of the fruit like wines, jams, and ice creams. We will also bring the visitors to the actual plantation of the fruit and well let them experience to plant and harvest dragon fruits. Also, the company will be selling cuttings to aspiring dragon fruit growers. C. HistoryDragon fruitsare originally native toMexico, and they were also transplanted toCentral Americaand to other parts of the world. According to Aztec literature, Pitahaya fruits date back to the 13th century. This fruit is a highly nutritious and healthy food that contains low level of fat and calories, vitamin C, phosphorus, calcium, fiber and antioxidants. Dragon fruits are also called as Pitaya, Pitahaya, fire dragon fruit, dragon pearl fruit, green dragon, or strawberry pear.Dragon fruit first come to the Philippines in 1900 through trade and exchange of goods with Spaniards. In the early 2000, Dragon Fruit farming is known to be possible in the Philippines but still gaining popularity. Thus, in 2003, a technology demonstration on dragon fruit production was established at the Central Experiment Station (CES) of the Southern Mindanao Integrated Agricultural Research Center (SMIARC) in Manambulan, Tugbok, Davao City. This Techno-demo farm was then visited by many aspiring dragon fruit growers and some consumers interested in the growing process of the fruit. With funding support from the Bureau of Agricultural Research (BAR) through its Agribusiness Development Project (ADP), the techno-demo farm aimed to:1. showcase technology on the production of dragon fruit,2. mass propagate and distribute to other regional research station or interested growers, and3. determine the economic value of dragon fruit.In year 2007, Ilocos started to grow the said fruit and formed theRare Eagles Forest Marine and Agricultural Development or Refmad Dragon Fruit Farm. And after years of operation, the owner, Edita Aguinaldo is then called as dragon fruit lady of the north. This dragon fruit plantation is currently the countrys leading exporter and distributer in the Philippines. And now, this farm has expanded to 13-hectare dragon fruit plantation in Paayas, Burgos, Ilocos Norte.Currently, the fruit is also cultivated in East Asian and Southeast Asian countries such as Cambodia, Thailand, Taiwan, Malaysia, Vietnam, Sri Lanka, the Philippines, Indonesia, and more recently Bangladesh. They are also found inOkinawa,Hawaii,Israel, northernAustralia, southernChina, and inCyprus.This growth of the dragon fruit agriculture sector still continues to boost creating more opportunities to future dragon fruit plantation.

D. Importance of the StudyAs the behavior of the society changes in relation to the food they eat the market for nutritious foods becomes more popular. Dragon fruit farming then started to grow to provide the markets needs. Ignite Dragon fruit farm comes as response to this change and to improve the current methods and techniques in growing dragon fruit.The farm will help in improving the yearly production of the fruit in order for the supply to get near to the markets current demand. In, Thailand where most of the new growing technologies in the Philippines are based have average dragon fruit yield of 30 metric tons per hectare while in the Philippines have an average yield of 20 metric tons per hectare. We will apply the latest growing techniques like the usage of artificial lighting and we will further improve these methods. The company will also study and make other methods that can improve the production capacity and proper maintenance of the plant and its fruit. Ignite dragon fruit farm will be helping in exposing the dragon fruit to the market. We will be committed in widening the knowledge of the market and its participants that can give more popularity to the fruit. Ignite dragon fruit farm will orient the people about the proper growing techniques and we will share to them the modern and the latest way of growing and producing dragon fruits. The company will enlighten the markets knowledge about the good benefits and nutritional values that the fruit can give. The business also aims to aide consumers in picking the sweet and well grown fruits against unsavory ones.The yellow dragon fruit is the sweetest yet hard to find in the market. In order to solve this problem, well be growing in the farm this said fruit. The Ignite Dragon Fruit Farm will study the proper way of growing this kind of fruit and that will eventually increase the supply of the fruit to be available in the market.This study will improve agricultural sector of the country and give better opportunities to future dragon fruit farming and plantation.

III. Industry Profile/AnalysisA. Industry OverviewDragon fruit farming is a slow growing business industry despite the very good potential of the industry. This is due to the innocence of fruit and vegetable farmers with the information about dragon fruit and its industry. Dragon fruit is a highly nutritious fruit. Most consumers are those who are finding a way to cure their relatives with some special disease and health problems. For example, the owner of Refmad Dragon Fruit Farm, Edita Aguinaldo-Dacuycuy, first tries the fruit when she learned that it is good for those with constipation, which is common to cerebral palsy patients like her daughter. Also, being the only fruit from a cactus gives the product more popularity to consumers. This popularity of the product still grows.According to some studies, the dragon fruits potential in the market is highly promising. This is because of the high returns and big profit of the business. Furthermore, this is said to be the new money-crop.Despite the existence of many farms in the Philippines today, the product supply still dont meet the growing demands in and outside the country.

B. SupplyDuring 2007, there are only a total of 37.7 hectares of dragon fruit farms in Ilocos Norte. But now there are more than 100 hectares of dragon fruit plantations. The annual yield of the country for dragon fruit averages 2,000 2,500 metric tons or 2,000,000 2,500,000 kg. The supply for the dragon fruit in the Philippines is continuously growing because of the high marketability of the product especially in other Asian countries. Also, the growing demand for processed products containing dragon fruits increases the number of interested and aspiring growers. Dragon fruit can be propagated through cuttings or seeds. A dragon fruit after 8 months to 1 year can produce its flowers when planted using cuttings. But it will take 5 years to flower if planted through seeds. In average, the yield per year of 1 hectare dragon fruit farm is ranging from 20 to 25 metric tons or 20,000 to 25,000 kg.The discoveries of methods and techniques to improve the production of the fruit also increase the supply of the dragon fruit in the market. Like the continuous harvest of dragon fruit even in off-seasons. This is the result of the study by a research team led by Leonardo T. Pascua, Dragon Fruit Research, Development and Extension Project Leader and Regional Techno-Transfer Coordinator of the Ilocos Agriculture and Resources Research and Development Consortium (ILARRDEC) based at the Mariano Marcos State University, Batac City. Pascua disclosed that the off-season production is made possible by manipulating the environment through artificial lighting using 6-watt Light Emitting Diode (LED) bulbs or 26-watt compact fluorescent lamps (CFL) from 10:00 pm to 2:00 am. The Refmad Dragon Fruit Farm which is the countrys leading producer and exporter of the product with 13-hectare farm exports 5 metric tons per week. Most farm largely focuses on supplying the global market even the demand in the local market is still not met.In Pangasinan there are also still few dragon fruit growers and farms. This makes the supply of the fruit in the province still low compared to the current demand.

C. DemandMost consumers of the products are those informed about the health benefits of the fruit and those who have health problems and maintaining the health of their body. And this demand in the market still grows because of the change towards healthy and nutritious food consumption.The demand for the dragon fruit grown in the Philippines can be divided into two different markets which are local and the global market. In the Go Negosyo, speakers encourage aspiring growers to invest in dragon fruit farming because of high demand in the global market. They said that the Philippines need 1,000 hectares of dragon fruit farms in order to sustain the need of the global market.In the local market, the dragon fruit demand is also in good condition. The fruit is still gaining popularity in the country thus the local demand is expected to grow more. The local market for dragon fruit involves not only the fruit but also the processed dragon fruit like jams, wines, ice creams and even soaps. The demand for the product in the local market still has high possibilities to grow in the coming years.

D. Porters Five Forces ModelLow Supplier PowerThe supplier power in the dragon fruit farming industry is very low because this type of business, especially those well-developed farms, rarely needs external suppliers. Most farming businesses dont need supplier because they are the primary supplier in the market. The growers just need to take care of the plants in order to improve the production of fruits and vegetables. In dragon fruit farming, seedlings and cuttings from outside suppliers are only needed in forming and developing the farm. Thereafter, cuttings from own plants will be used in propagating the plants. Also, organic fertilizers are the ideal fertilizers for dragon fruits.

Low Buyer PowerThe buyer power in our business is low because the consumers actions dont affect the products market and its prices.In local market where the demand for dragon fruit is more than the supply, its only natural that the consumers cant influence the price moreover the growers have alternative market to offer their product, which is the global market. For example, when the price in the local market significantly decreases and relatively stable in the global market, the local growers of the dragon fruit will sell their product at the global market. As a result the supply of dragon fruit in the market decreases and the burden then goes to the consumers. Our business, Ignite Dragon Fruit Farm currently is not overpowered by the consumers. This is a good strength of the business in the industry.

High Threats of new entrantsCost of entrance and exit price in specific market are vital in deciding to invest in a certain business. Most decision makers evaluate these factors and study the effects of these costs. Cost of entrance in the dragon fruit market and dragon fruit farming is low because of absence of restrictions by government. Also the barriers to enter the market are low. In fact the dragon fruit can be planted even in our homes backyard with little cost. The low cost of entry in the market attracts aspiring growers to invest and enter the market. Furthermore, different government agencies help and assist these growers in developing their farm. These features of the product heighten the threat of new entrants of our business.Many growers consider growing dragon fruits making a market for farms. This also increases the business threat of new entrants.

Low Threats of Substitutes Dragon fruits really are quoted at higher price than other fruits in the market. But this does not heighten the companys threats of substitutes because only few fruits have many benefits and nutrient contents like the dragon fruit. Kiwi fruits and pears are both highly nutritious fruits and some people compare these products to the dragon fruit. But these products are priced higher in the market.

Low Competitive RivalryAs stated earlier in the supply of the dragon fruit in the Philippines, the leading dragon fruit grower have 13-hectare farm over a total of 100 hectare dragon fruit farms in the country. This shows that there is a low concentration of market share in the industry. In this industry, the numbers of competing firms is growing. Also, there is minimal product differentiation in this market that may lead to higher intensity of competition. But in the dragon fruit business, the intensity of competition between farms is still low because of the fast growing demand for the market. These factors compensate for the increasing volume of dragon fruit growers in the country and the minimal product differentiation in the market. Also, the dragon fruit growers in our country can sell its product either in local or at global market. Furthermore, the low cost of exit in the market because of absence of asset specifications and the salability of existing farms lead the rivalry among competitors into low intensity.

E. SWOTStrengths Efficient production of dragon fruit using the latest methods/techniques that improves annual yield per hectare The products several health and nutritional benefits The farm tour offered by the company that can give more popularity to the farm The farm location in Burgos, Pangasinan which is among the high lands in Pangasinan making the farm free from flood The fertile land in Burgos, especially our farm site which is still unused, further improves yield rate The easy and fast way of propagating the plants using cuttings Organic way of growing dragon fruits The long life span of the plan

Weaknesses Premium price of the product compared to other fruit Inexperienced management team of the company regarding actual work place The plant spacing feature of the fruit that uses wider land space compared to other fruit and vegetable products.

Opportunities There is already existing market for the companys products The Philippines being a tropical country helps in proper growth of the plant The rarity of yellow dragon fruit in the Philippine market Dragon fruit can be processed into variety of products like jams, wines, ice creams, vinegar etc. The supply of the product in Pangasinan market and other provinces still dont meet the markets demand The increasing popularity of the dragon fruit can improve the current market The shortage in supply of dragon fruit compared to demands both in local and global market

Threats The countrys existing dragon fruit farms and plantations The unsavory and tasteless perception of some consumers of the fruit in Pangasinan market Changes in government regulations that may affect dragon fruit market Calamities in the Pangasinan that may affect production capacity and other factors

IV. Company/Business ProfileA. BackgroundIgnite Dragon Fruit Farm is a dragon fruit plantation aimed to strengthen the dragon fruit industry of the Philippines, especially in Pangasinan.The company will also make some research that will further help and improve the growing and production capacity of dragon fruits.Ignite Dragon Fruit Farm will be located at San Pascual, Burgos, Pangasinan where well be growing our organic dragon fruits that will be distributed in Pangasinan market and some nearby provinces. Regarding product distribution, we will be targeting different malls and super markets in and outside Pangasinan as a way to providing the market our best grown organic dragon fruits. And will be supplying different export traders as our major customer. Ignite Dragon Fruit Farm will also be available for visit and tours to those who are interested to learn about dragon fruits and its growing techniques. The researchers of this business will compose the companys management team. But due to lack of experience in actual farms, the company will employ knowledgeable and experienced dragon fruit growers.

B. Vision and MissionVisionThe leader in the Philippines in producing and promoting organic dragon fruit as the countrys new top export product and the best organic dragon fruit farm in Pangasinan.

MissionTo produce the best organic dragon fruit varieties that can bring the best satisfaction to consumers and sustain the needs of the market as support to the growing demand of the product both in local and international markets.

C. Long-Range/Specific ObjectivesThe company will be committed to provide the best organic dragon fruits in the market and will continuously strive to satisfy the consumers regarding taste, societal responsibility, and health factors. The company will also be committed in achieving and maintaining its specific objectives as follows: To promote healthy life style through growing and distributing healthy and highly nutritious organic dragon fruits To distribute to the consumers the best grown and best tasting dragon fruits To develop the best farms for dragon fruit and insure to maintain the quality of our product To help to provide both the local and global market sufficient dragon fruit to meet the consumers demanded To widen the consumers knowledge about the good benefits of the fruit The company, after successful entrance to the dragon fruit industry, will consider the growing of hybrid dragon fruits.

D. Company/Business Name and LogoOur NameIgnite Dragon Fruit Farm is a company engaged in growing organic dragon fruit. We called it Ignite due to various reasons that are related to our product and our companys objectives. Ignite literally means to start to burn and comes from the latin word ignis which means fire. Dragon fruit has a thin and scaly skin that forms a shape similar to fire thats why they also called it fire dragon fruit. Also fire can be easily spread like dragon fruits propagating method, the usage of cuttings. But the main reason we name our farm as Ignite because of the fires ability to give light in the dark. Our company aims to enlighten and improve the knowledge of the market and its participants about dragon fruit especially here in Pangasinan. We want to spread around the Philippines the nutritional and health benefits of the product to human body and other relevant factors that will encourage the people to patronize the fruit.Our Logo Figure 4.4.1

E. Location/Vicinity MapDragon fruit must be planted in an open field with direct exposure to sunlight. It is not conducive to plant the crop in areas where rainfall is well distributed. Site should be free draining with a sandy loam soil with a high organic content.The Ignite Dragon fruit farm will be located at San Pascual, Burgos, Pangasinan and takes 2.5 hrs trip from Dagupan City as illustrated bellow.Figure 4.5.1

Our Dragon fruit farm is to be established in an unused 3-hectare agricultural land. This a good location for our farm because of the elevated feature of the land compared to other agricultural land in the province. This will give our plantation a good sunlight and will make our farm be free of flood.

The aerial view of the proposed site for Ignite Dragon Fruit Farm is shown below.Figure 4.5.2

V. Review of LiteraturePitayagrowers continue to increase throughout the country, from the provinces of Cavite, Ilocos, Bicol, all the way to Davao, and even a couple of commercial planting farms in Pangasinan, Nueva Ecija and Quezon. Its reputation of profitability continue to spread, and more farmers are committed to the production of dragon fruit. Selling expensively in the local market, roughly PhP 150 180 per kilo and even higher abroad, dragon fruit is tagged by the Department of Agriculture Bureau of Agricultural Research (DA-BAR) as a money crop. With little investment capital and maintenance for growingpitayaand producing dragon fruit, DA-BAR pushes on to discovering planting techniques to increase the productivity of thepitayacactus.Research and development (R&D) initiatives to fully uncover the possibilities presented by dragon fruit were undertaken in 2003 by DA-BAR through its Agribusiness Development Project (ADP). In collaboration with the Southern Mindanao Integrated Agricultural Research Center (SMIARC) in Davao City, the initiative was able to: 1) enhance and share the production technology of dragon fruit, 2) propagate seedlings for distribution to other interested growers, and 3) establish the value of the produce. To this date, the techno-demo farm in Davao City continues to draw-in interested growers and producers for techniques and planting materials they need to begin their dragon fruit garden or farm.One agenda of R&D is ensuring that the natural resources in the Philippines are used and maximized to its full potential such as the unexplored fruits common in our country. The culinary, medicinal, and economic possibilities of these Filipino fruits are endless and are waiting to be discovered. It is up to us to continue unearthing these agricultural wonders for a food self-sufficient Philippines. (Zuellen B. Reynoso)In the first four years of a dragon fruit farm, one can realize an accrued net income of PhP 2.5 million, according to the Mariano Marcos State University (MMSU) in Ilocos Norte.Dr. Miriam Pascua, MMSU president, cited the following to The STAR:In the second year when the dragon fruit plants begin to bear fruits, a plantation owner can harvest at least 10 metric tons valued at PhP 650,000. In the third year, 15 metric tons of dragon fruits valued at Php 1 million can be reaped.Accrued net income for four years is PhP 2.5 million at farm gate price per kilogram of PhP 80, the MMSU president said.MMSU is a five-campus university whose seat of administration is the main campus in Batac City situated 470 kilometers northwest of Manila.Dr. Pascua said that from 1,111 to 1,666 planting materials of this vine-like species of cactus could be planted in a hectare.Scientifically named Hydrocerousundatus, dragon fruit is fast becoming the apple of the eye of the Ilocos fruit industry.About 1,000 hectare has been envisioned to be planted in Ilocos Norte in line with the provincial governments goal to make the countrys northwestern most provinces as the dragon fruit capital of the Philippines.(Rudy A. Fernandez)

VI. Market FeasibilityMarket DefinitionIgnite Dragon Farm will be dividing its market into two segments, namely the local and global market. The local market corresponds to the targeted institutions by the company to whom the dragon fruits will be delivered. This market includes institutions such as the CSI, Magic, Robinsons, and SM that are located within the borders of Pangasinan. Also, the Regarding its activities concerning the global market, the company will be selling its products to export traders who will be directly associated to exporting dragon fruits to other countries. The easiest way to enter the global market is through these traders.In both market, the Ignite Dragon Fruit Farm will be offering the Pitaya Roja, the red-skinned dragon fruit with red flesh and the Pitaya Amarilla, the yellow-skinned dragon fruit with white flesh.

Agriculture IndustryFigure 6.1

Source: Bureau of Agricultural Statistics BASIn the country, the agricultural productivity and its share to total exports significantly decline starting 1980 but by the year 2000 the share of agricultural exports to countrys total exports is gradually increasing.

The graphical illustration of percentage distribution of the countrys agricultural exports from 2004 to 2010 is shown below.Figure 6.2

Source of basic data Bureau of Agricultural Statistics (BAS)This graph shows that the United States of America consumes the largest percentage of the countrys exported agricultural produce.One of the growing agricultural business sectors in the Philippines is the production of dragon fruits especially in northern part of Luzon like Ilocos and Pangasinan. Pangasinan is a province that stabilizes its economy mainly through agricultural and aqua-cultural activities. Most people residing in the province earn their income through these activities.In the past seven years, the supply of dragon fruit in the country increased from 37.7 hectares of farms to more than 100 hectares with yield of 20 25 metric tons per hectare of fruit every year. This increase in supply is driven by the larger increase of demand in both global and local market.Dragon fruit farm in Piddig, Ilocos Norte posted on facebook that on September 7, 2014 they receive a buy offer of 14,000 kg of dragon fruit and 3,000 on August 9, 2014 but they dont have more resources to fill the orders. This indicates that dragon fruit production in the country is far from the demand in local and global market.Also according to Edita Dacuycuy, the country needs to develop 1,000 hectare dragon fruit farms in order to sustain the demand of the fruit in the global market. Also, she said that several traders engaged in the global market approached her to deliver 300 metric tons per week but the farms production is still far from this offer. Furthermore, the dragon fruit industry in the Philippines is said to be the new money-crop by the Department of Agriculture.The country is now part of the free trade agreement on dragon fruit among ASEAN nations. Also through ASEAN, the country entered another free trade agreement with China, Korea, India, Japan, Australia, and New Zealand. This fact implies that the market for dragon fruit has really a big potential.

SupplyPhilippines is ranked 24th in the world when it comes to supply of fruit excluding wines. This is based on the studies of the world statistics organization.Philippines now have more than 100 hectares and almost all of these 100 are located in Ilocos Norte. Most of these farms distribute their product to traders who will sell dragon fruit in foreign countries like China, Korea, and Japan. Mariano Marcos State University in Ilocos concluded that in the first year of harvest a minimum of 10 metric tons per hectare will be produce and 15 metric tons in the second year. And for the whole country, the average yield of all dragon fruit farms is ranging from 20 - 25 metric tons per year. This increase in the yield rate is the result of new methods like the lighting of the plant during night.With 100 hectares of farm in the country, the approximated production of dragon fruits per year ranges from 2,000 to 2,500 metric tons or 2,000,000 2,500,000 kg.

Pitaya Amarilla SupplyYellow pitaya is rarely found in the Philippine market but the number of farms growing this variety is increasing. It is not common in Philippine market despite being the sweetest of all sweet dragon fruit because of its nasty thorn protection. These thorns must be removed before harvest using pliers, brush and gloves. But the main reason of its rarity is the relatively small sizes of the fruit compared to other varieties of dragon fruit which make the fruit less popular to growers

DemandThe demand of dragon fruit in global market is really high compared to the countrys annual yield. In fact, almost all farms growing dragon fruits cannot meet all of their customers orders. One example is the unmet customer order of 17,000 kg of a farm in Piddig, Ilocos Norte during the third quarter of 2014. The traders demand for dragon fruit of Ilocos approximates 300 metric tons per week. This amount is what the traders ordered when they approached Edita Dacuycuy, the President of the Philippine Dragon Fruit Growers and Processors National Council. For all the farms in the country, approximately 20,000 metric tons or 20,000,000 kg of dragon fruit is demanded by traders based on the 1,000 hectare dragon fruit plantation projection of Edita Dacuycuy. Unfortunately, the country is still very far from meeting this demand of the traders engaged in global market. Other Market InfoIn the local market, the company will be targeting the different malls and supermarket in Pangasinan. For supplying these different malls, the company will be communicating with the purchasing supervisors or other officers with same responsibility the terms and conditions of distribution. For SM and CSI the product will be distributed on consignment basis, for other malls, contract of sale will be entered as goods are delivered.The listing of the malls and supermarkets within Pangasinan that purchases and sells dragon fruit is shown below. Table 6.1CSI The City Mall DagupanLucao District, Dagupan City, Pangasinan

CSI The City Mall San FernandoSan Fernando City, La Union

CSI UrdanetaNancayasan, Urdaneta City, Pangasinan

CSI Warehouse Club AlaminosRomulo Hiway, Alaminos City, Pangasinan

CSI Warehouse Club San CarlosPoblacion, San Carlos City, Pangasinan

CSI Warehouse Club UrdanetaNancayasan, Urdaneta City, Pangasinan

CSI Y.E.S. BayambangRizal Ave, Bayambang, Pangasinan

CSI Y.E.S. MalasiquiProvincial Road, Malasiqui, Pangasinan

CSI Y.E.S. San CarlosRizal Ave, San Carlos City , Pangasinan

Magic Mall UrdanetaMacArthur Highway, Urdaneta City, Pangasinan

Magic AlaminosAlaminos City, Pangasinan

Magic DagupanMalimgas Market, Dagupan City, Pangasinan

Magic LingayenLingayen, Pangasinan

Magic MangaldanMangaldan, Pangasinan

Magic San CarlosSan Carlos City, Pangasinan

Magic UrdanetaUrdaneta City, Pangasinan

Nepo Mall AlaminosMarcos Avenue, Alaminos City, Pangasinan

Nepo Mall DagupanArellano Street, Dagupan City, Pangasinan

SM RosalesRosales, Pangasinan

Robinsons Place PangasinanCalasiao, Pangasinan

Target Market ShareMarketPercentage based on Companys good productionPercentage based on the market demand

Institutional Market2%23.48%

Fruit Export Traders98%0.4%

Local MarketInstitutions The company will be targeting to supply 2% of its good production, with annual production of 82,168.7 kg, to institutional markets which approximates 1.64 metric tons or 1,643.4 kg per year. Based on our study, the approximated demand of institutional markets for dragon fruits amounts to 7,000 kg per year which we derived from their periodic orders.

Global Market The company targets to supply the export traders of dragon fruit by 98% of the companys good production. This approximates 80.5 metric tons or 80,525.3 kg per year which is 0.4% of the current global demand for dragon fruit which is 200 metric tons or 20,000,000 kg. Traders usually exports but some traders just sell the fruit to other cities in the country like Manila and Baguio City.

Customer ResearchThe researchers in determining the demand of different institutional markets in Pangsinan inquires their respective purchasing supervisors about their periodic dragon fruit purchases. And the following information was gathered:1. The annual demand of malls and supermarkets shown in table 6.1 approximates 7,000 kg;2. The average purchase price from their current supplier ranges from Php 120 -150;3. Dragon fruit are only available during its regular harvesting season that runs from May November;4. For CSI Malls and SM, dragon fruit are sold through consignment basis; and5. Other malls enter with their suppliers in a contract of sale.For dragon fruit export traders, the terms and normal purchasing procedure provided by the Refmad Dragon Fruit Farm are as follows:1. Orders and payment from traders are received months before their harvest because of the limited supply in relation to current demand; and2. Dragon fruits are usually delivered from them to their buyer with Refmad paying the delivery expense.

Marketing MixPriceThe companys dragon fruit, concerning the Pitaya Roja, will be offered in the market at the same rate as other farms growing dragon fruits. Because of the absence of product differentiation it will not be feasible for us to mark our product higher than those existing farms. This price ranges from PhP 100 120 per kg. During the harvesting season of the dragon fruit prices will be set at PhP 100 per kg and at PhP 120 during off-season.The Pitaya Amarilla, will be quoted at PhP 110 130 which is higher price than the other types of dragon fruit because of its lesser availability in both global and local market. Also, its sweeter feature increases the consumers preference of this type of dragon fruit than others. But the price will also be quoted at same rate with other yellow dragon fruit.

PlacementIgnite Dragon Fruit Farm will be dividing its market into two segment which is the local and global market for the dragon fruit. Local MarketInstitutions such as CSI, Magic, SM, and Robinsons are the main target market of the company in local market.

Global MarketIn order to enter this international market, the company will be distributing its product to export traders who will export the fruit to other countries.

Promotional StrategyThe companys main promotions will be made through social networks in internet like facebook and instagram. The company will be active in these websites in order to update our customers. The company will be open for free visit to increase the knowledge of the consumers about dragon fruits. In this tour, the company will teach visitors about the fruit, its benefits, history of the fruit and the company, products that can be made out of it, basic growing methods and other more. Also, willing visitors will experience harvesting the fruit during harvesting season. But the fruits they harvest will be paid by the visitor.

Sales ProjectionThe sales projection of Ignite Dragon Fruit Farm in the first five years of operation is illustrated below. Table 6.5PeriodProduction(kg)Sales(kg)Sales Price per kg(PhP)Sales Amount (PhP)

Year 1 August5,142.95,117.2100 & 110528,777.3

September 5,142.9 5,117.2 100 & 110 528,777.3

October5,142.95,117.2100 & 110528,777.3

November5,142.95,117.2100 & 110528,777.3

December4,516.34,493.7120 & 130554,223

Year 2 January4,516.34,493.7120 & 130554,223

February4,516.34,493.7120 & 130554,223

March4,516.34,493.7120 & 130554,223

April4,516.34,493.7120 & 130554,223

May5,142.95,117.2100 & 110528,777.3

June5,142.95,117.2100 & 110528,777.3

July5,142.95,117.2100 & 110528,777.3

August5,142.95,117.2100 & 110528,777.3

September5,142.95,117.2100 & 110528,777.3

October5,142.95,117.2100 & 110528,777.3

November5,142.95,117.2100 & 110528,777.3

December4,516.34,493.7120 & 130554,223

Year 367,581.667,243.7100/120 & 110/1307,397,888.7

Year 482,581.682,168.7100/120 & 110/1308,940,138.7

Year 582,581.682,168.7100/120 & 110/1308,940,138.7

Total316,414.5314,832.533,450,591.4

The annual sales is 99.5% projected harvest computed using yield per hectare of 12 tons for the second year, 15 tons for the third, 20 tons for the fourth and fifth year during the regular harvesting season, which is from May to November, and wherein 1 metric ton equals 1,000 kg, and 7,527.2 kg during off-season for all years except the first year. In the first year, 20,571.6 kg will be harvested from August to November, and 4,516.3 kg will be harvested in December with the help of artificial lighting.Two hectares out of three will be dedicated to planting the Pitaya Roja, while the remaining 1 hectare will be planted with Pitaya Amarilla. Also, price of PhP 100 will be quoted per kg of the Pitaya Roja fruit for the regular harvesting season and PhP 120 for the off-season. For the Pitaya Amarilla, PhP 110 per kg will be quoted during the regular season and PhP 130 during off-season.

VII. Production/ Technical FeasibilityThe company being an agricultural business and because of the need for the natural process of flowering and fruit production of the plants, will only be performing methods that will enhance the yield of the farm. Also, maintenance and preservation procedures for the farm will be employed in the operations of the company.In order to harvest the budgeted output quantity and quality and to meet the quotas set by the management, the company will follow the given procedures below.

Planting and Propagating ProceduresDragon fruit can be propagated through seeds or cutting. The company will be propagating the dragon fruit using cuttings because this enable faster harvesting of fruit which takes 8 months to year only. Dragon fruit planted using seeds takes 5 6 years to bear fruit. Also, propagating using cuttings is a lot easier than using seeds.

The planting of plant using cuttings is shown below.1. Cuttings from fully grown dragon fruits will be used to propagate the plant. 15 - 20 cm cuttings are used for planting. Cuttings will b piled up 1 2 days prior to potting. Figure 7.1

2. A mixture will be prepared in a pot where the cuttings will be planted and will compose of dry cow dung, sand, and soil on top. These cuttings in the pot will be kept in shade to rooting and the rooted cuttings will be acclimatized before planting.

In planting both the Pitaya Roja and Pitaya Amarilla, 2 x 2 meters spacing will be applied which will provide a space for 5,000 concrete posts. The pit size for the plants will be 60 x 60 x 60 cm.

Training of PlantsDragon fruit needs support to up right growth. Immature stems will be tied to a concrete column. But thereafter aerial roots developed and bound to column. Lateral shoots must be eliminated and 2 - 3 main stems are allowed to grow. Because lateral shoots must be removed time to time, we will arrange round metal frame to maintain balanced shrub. This spreads the hanging shoots balance way.Once the plant reaches a mature 10 pounds in weight, the plant may flower.Figure 7.2

FloweringIn the Philippines dragon fruit flowering season runs from May through November. The first flowering of the plant may differ according to the way of planting. It will take 7 months to 1 year for a dragon fruit to flower if planted through cuttings. But it will take 5 years to flower if planted through seeds.

LightingFor continues flowering of the dragon fruit we will apply artificial lighting that will enable us to harvest even in off season. This is the result of the study by a research team led by Leonardo T. Pascua, Dragon Fruit Research, Development and Extension Project Leader and Regional Techno-Transfer Coordinator of the Ilocos Agriculture and Resources Research and Development Consortium (ILARRDEC) based at the Mariano Marcos State University, Batac City. Pascua disclosed that the off-season production is made possible by manipulating the environment through artificial lighting using 6-watt Light Emitting Diode (LED) bulbs or 26-watt compact fluorescent lamps (CFL) from 10:00 pm to 2:00 am. In this purpose, Ignite Dragon Fruit Farm will be using the 6-watt LED because of its better income results compared to the use of 26-watt CFL. Using the 6-watt LED a hectare can produce 7,507.2 kg during the 5-month off-season.

Fruiting and HarvestingFruits will be matured 30 - 35 days after flowering. Outer cover of immature is in bright green color. It will become red in color with ripening. Proper time of harvesting is after four days of color changing. But for export purpose, it is important to harvesting a day after color changing. Figure 7.3

For the harvesting of the Pitaya Amarilla, the thorns must first be removed using brush, and those tiny thorns not removed by the brush will be removed using pliers.

Organic FertilizerWell be using organic fertilizer in giving nutrients to our farm. Organic fertilizer is very important to proper growth and development of dragon fruit plant. Because applying 15kg of organic fertilizer per plant can increase the amount by 2kg per year up to 20kg. The young plants will be filled by 1/8 lbs of organic foliar and 14-14-14 complete fertilizer in the first month and every other month while mature plants will take lbs.

Other Horticulture The optimal rainfall of the cacti should be between 600 - 1300mm since excess rainfall will cause the flowers to drop, definitely reducing the fruit set. The biggest enemy of the cacti is water logging as it kills it. Equally, excess humidity causes proliferation of soft rot caused by the erwinacarotovora bacteria. A dry rot on the other side is caused by extreme soil moisture. Shading will be used in times where there are excessive light. This will be made through setting temporary tents and others. Just like the rainfall, excessive temperature can damage the Pitahaya fruit. Optimal temperatures should be between 38-40 degrees Celsius. The effects include abnormal browning and the stems of the affected plants may end up liquefying. Flowering is equally affected by excessive temperatures. Ants and other pests will damage the plant and its fruit. We will be applying preventive measures for these creatures.

DistributionIn distributing the respective orders of the companys customers, the company will be outsourcing delivery companies to transport. Value Chain

End ConsumersGlobal MarketFigure 7.4

Ignite Dragon Fruit Farm, which is the ultimate supplier in the commodity flow, will be producing dragon fruits to be distributed to different intermediaries, which are the public markets, institutional markets, and export traders. Export traders will enter the global market then the global market, as well as the public market vendors and institutional markets will give the product to the end consumers.

Revenue ProcessFigure 7.5

Sales order coming from customers will initiate the revenue recognition process of the company then approval, distribution, and billing. The same process will be applied to both global and local market.

Farm Tour ScheduleWith regards to farm tours offered by the company, visitors must coordinate with the companys tour schedulers at least one week before their planned tours. This is for the preparation of the tour guides and for proper allotment of time by the schedulers.Farm tours will be open for visitors as shown in the table.Table 7.1Days and TimeMondayTuesdayWednesdayThursdayFridaySaturday

Morning Session10:00 am -11:00 pm10:00 am - 11:00 pm10:00 am - 11:00 pm10:00 am - 11:00 pm10:00 am - 11:00 pm10:00 am - 11:00 pm

Afternoon Session1:00 am - 2:00 pm1:00 am - 2:00 pm1:00 am - 2:00 pm1:00 am - 2:00 pm1:00 am - 2:00 pm1:00 am - 2:00 pm

Also, the visitors must comply with the following rules established by the management. 1. Foods and drinks are not allowed inside the farm2. Visitors wearing slippers will not be allowed to enter the farm3. Walk ins are not allowed in the tour

Farm Tours ProcessingFigure 7.6

Visitors must apply for the tour for at least 1 week before their planned visit which will be evaluated by the VP for Marketing for approval and after approval; employee under the authority of the VP for Production will be coordinating with the visitors for scheduling, and then the tour.

Farm Site LayoutFigure 7.7 9 m Grower House 2

Dragon Fruit Farm

Office and Fruit Storage RoomGrower House 1

8 m

173 m

8 m

9 m 173.5 m5,000 concrete posts will be built in the plant site and 4 dragon fruit plants will be planted in each post. The grower house 1 and 2 will be occupied by four permanent growers who should be two pairs of married couple. While the office and storage room is where fruits will be stored and where seminars will be held as part of the farm tour. Also, the company records will also be placed inside the office.

VIII. Organizational/Management FeasibilityBusiness TypeIgnite Dragon Fruit Farm will be formed by the researchers namely, Crishell Fernandez, Jeanette Monterola, Mark Avedon Nevado, and Regine Soriano as partners. The partners will compose the management team with different scopes of responsibilities.

Organizational StructureFigure 8.1

Jeanette MonterolaPartner 2MRegine SorianoPartner 4MMark Avedon M. NevadoPartner 3MCrishell FernandezPartner 1M

Operations Manager(Mark Avedon Nevado)M

Executive VP for Marketing(CrishellFernandez)MExecutive VPfor Production(Regine Soriano)MTreasurerMChief Financial Officer(Jeanette Monterola)M

4 Regular FarmersM

Duties and ResponsibilitiesPartnersThe Partners will be serving as board of directors who will be performing the final strategic decisions of the company.

Operations ManagerThe Operations Manager will be responsible for the overseeing, designing, and controlling the process of production and redesigning the business operations for production of dragon fruit and process for the farm tour. This includes the enhancement of operations through efficient an effective production processes to meet the customers needs.

Chief Financial OfficerThe CFO will be responsible in supervising the accounting staff for preparing and maintaining reports to be used both in managerial and financial accounting and reviewing the reports to assess the effectiveness and efficiency of operations. The CFO will take part in ensuring the accuracy of the companys records and financial reports.Its also the CFOs responsibility to assess the effectiveness and efficiency of internal control and check whether the established controls are being applied.

Executive VP for ProductionThis position will be directly associated to producing and growing of dragon fruits in the farm. The VP for Production will be responsible for meeting the production quotas established by the decision makers.

The VP for Production responsibilities include but are not limited to the following:Supervising the farmers in growing the plants Implementing proper growing methods and techniques Maintaining the quantity and quality of fruits harvested Maintaining the cleanliness of the farm Minimizing the operations and overhead cost Proper disposal of waste products (includes processing of waste to other products)

Executive VP for Marketing The VP for marketing will be responsible for introducing and offering the products to existing and potential customers. The VP will be the one arranging the terms with traders and institutional buyers subject to established standards of the company. The VP will also be marketing the product and the company itself to increase the market share.In addition, the VP for Marketing will be responsible in coordinating tours and visit in the farm.

TreasurerThe Treasurer will be responsible for safeguarding the companys assets especially cash and cash equivalents and will be responsible for raising capital and managing investments. In addition, the Treasurers responsibility includes the management of credit policy and insurance coverage for the company.

Growers Compensation SchemeThe company will be paying employed growers at PhP 250 per day which is above the minimum requirement of PhP 233 per day based on the regional daily minimum wage for agriculture. In addition to the growers basic salary, the growers will be allowed to occupy a house in the farm with their family. This will help in proper maintenance of the farm and for the company to be more responsive to unanticipated events such as storm and other calamities.

IX. Financial FeasibilityA. Major AssumptionsDragon Fruit Production From planting, the dragon fruit plants will bear fruit after 8 months.

Two of the three-hectare farm will be planted with Pitaya Roja and the remaining with Pitaya Amarilla.

In the first year, 20.6 metric tons will be harvested or 20,571.6 kg from August to November and only 4,516.3 kg will be harvested during off-season per hectare which is equal to 7,527.2 multiplied by 3 and divided by 5.

The annual yield is based on the projected harvest computed using yield per hectare of 12 tons for the second year, 15 tons for the third year and, 20 tons for the fourth and fifth year during the regular harvesting season, which is from May to November and wherein 1 metric ton equals 1,000 kg, and 7,527.2 kg during off-season for all years except the first year.

Spoilage will approximately amount to .5% of the budgeted production

Sales Having shortage in the supply of dragon fruit compared to its demand, all harvest of the company will be sold out to customers.

The yearly demand for dragon fruit in international market approximates 20,000 metric tons or 20,000,000 kg and Ignite Dragon Fruit Farm will be supplying export traders 80.85 tons or 80,849.04 kg during the later years which is 98% of the companys total production that will be equal to market percentage share of 0.4%.

Pitaya Roja will be priced at Php 100 during its regular harvesting season which runs from May to November and at PhP 120 during off-season. While the Pitaya Amarilla will be priced at PhP 110 and PhP 130 during regular harvesting and off-season, respectively.

Schedule of annual yield and sales for first five years of operation is shown below.

PeriodProduction(kg)Sales(kg)Sales Price per kg(PhP)Sales Amount (PhP)

Year 1 August5,142.95,117.2100 & 110528,777.3

September 5,142.9 5,117.2 100 & 110 528,777.3

October5,142.95,117.2100 & 110528,777.3

November5,142.95,117.2100 & 110528,777.3

December4,516.34,493.7120 & 130554,223

Year 2 January4,516.34,493.7120 & 130554,223

February4,516.34,493.7120 & 130554,223

March4,516.34,493.7120 & 130554,223

April4,516.34,493.7120 & 130554,223

May5,142.95,117.2100 & 110528,777.3

June5,142.95,117.2100 & 110528,777.3

July5,142.95,117.2100 & 110528,777.3

August5,142.95,117.2100 & 110528,777.3

September5,142.95,117.2100 & 110528,777.3

October5,142.95,117.2100 & 110528,777.3

November5,142.95,117.2100 & 110528,777.3

December4,516.34,493.7120 & 130554,223

Year 367,581.667,243.7100/120 & 110/1307,397,888.7

Year 482,581.682,168.7100/120 & 110/1308,940,138.7

Year 582,581.682,168.7100/120 & 110/1308,940,138.7

Total316,414.5314,832.533,450,591.4

Gain on Agricultural Produce Harvested dragon fruits will initially be recorded as gain in agricultural produce measured at fair value less cost to sell which is equal selling price.

Cost of Sales Inventory cost will be composed solely of agricultural produce which is the dragon fruit.

Expenses Pre-operating Expenses will be incurred in the first year of operations that includes the following SEC Registration Fee of PhP 11,620.

Land Clearing Expenses of PhP 10,000 will be incurred in the first year. Tools to be purchased in cultivating the land and in continuous maintenance and harvest for the dragon fruit plantation will be expensed in whole during the first year.

Operating Expenses Miscellaneous expense Every month 100 kwh of electric consumption will be used and an additional 2,880 kwh per month from December to April for the implementation of artificial lighting. The electricity charge will be computed using the rate of PhP 10 per kwh. The water consumption of the farm is PhP 6,000 per year. 14 - 14 14 Fertilizer which costs PhP 36,000 per year Foliar Fertilizer which costs PhP 7,500 per year

Harvesting Expenses Harvesting expenses will be PhP 5 per kg of dragon fruit.

Delivery expense is PhP 2,000 per day and it will take two days to deliver every month of harvest.

Salary and wages expense is based on the daily wage of four growers, two married couples, at a rate of PhP 250 per day with the company having 365 working days per year plus monthly Meal & Rice Allowance of PhP 1,500 for each couple.

A 5% cost escalation rate will be applied for Operating Expenses for the years after first year of operation.

The schedule of Operating expenses is shown below.

PeriodMiscellaneous ExpenseHarvesting ExpenseDelivery ExpenseSalary & Wages ExpenseTotal Operating Expense

Year 1 January5,125--34,00039,125

February5,125--31,00036,125

March5,125--34,00039,125

April5,125--33,00038,125

May5,125--34,00039,125

June5,125--33,00038,125

July5,125--34,00039,125

August5,12525,714.52,00034,00066,839.5

September5,12525,714.52,00033,00065,839.5

October5,12525,714.52,00034,00066,839.5

November5,12525,714.52,00033,00065,839.5

December33,92522,581.52,00034,00062,553.5

Year 2 January35,621.322,581.52,10035,70096,002.8

February35,621.322,581.52,10032,55092,852.8

March35,621.322,581.52,10035,70096,002.8

April35,621.322,581.52,10034,65094,952.8

May5,381.327,000.22,10035,70070,181.5

June5,381.327,000.22,10034,65069,131.5

July5,381.327,000.22,10035,70070,181.5

August5,381.327,000.22,10035,70070,181.5

September5,381.327,000.22,10034,65069,131.5

October5,381.327,000.22,10035,70070,181.5

November5,381.327,000.22,10034,65069,131.5

December35,621.322,581.52,10035,70096,002.8

Year 3226,564372,543.626,460442,102.51,067,670.1

Year 4237,892477,992.627,783464,207.61,207,875.2

Year 5249,787501,892.329,172.15487,4181,268,269.5

Taxes and Licenses Annual BIR Business Registration Fee of PhP 500. Business Permit of PhP 1,800. Barangay Clearance of PhP 80. Police Clearance PhP 115. Mayors Permit PhP 90. Sanitary Permit PhP 350. Annual Real Property Tax will be paid at the end of the year with amounts as shown below.Year 1Year 2Year 3Year 4Year 5

Real Property Tax 18,73318,701 18,670 18,63918,608

Annual Community Tax of 500 and an additional tax not exceeding 10,000 in accordance with the following schedule 2 for every 5,000 worth of real property owned during the preceding year 2 for every 5,000 of gross receipts during the preceding yearThe Schedule of Total Community Tax Expense is shown below.

Year 1Year 2Year 3Year 4Year 5

Basic Annual Community Tax500500500500500

Additions based on Real Property1,5501,5461,5401,5361,530

Additions based on Gross Receipts9302,3542,9743,5943,594

Total2,9804,4005,0145,6305,624

Schedule of Total Taxes & Licenses is shown below.Year 1Year 2Year 3Year 4Year 5

BIR500500500500500

Business Permit1,8001,8001,8001,8001,800

Barangay Clearance8080808080

Police Clearance115115115115115

Mayors Permit9090909090

Sanitary Permit350350350350350

Real Property Tax 18,73318,70118,67018,63918,608

Community Tax2,9804,4005,0145,6305,624

Total Taxes & Licenses24,64826,03626,61927,20427,167

Depreciation Expenses

Dragon Fruit Plants will be classified as PPE of the company; this is due to amendments to IFRS where PFRS are based. The plant will be depreciated over the average useful life of dragon fruit which is 20 years The Concrete Post will be depreciated over 20 years using straight line method with no residual value at the end of these assets lives. The buildings will be depreciated over 20 years using straight line method with no residual value at the end of these assets lives. The Lighting equipments will be depreciated using production usage method with total estimated usage of 15,000 hours and that 4 hours will be used every night with yearly usage of 124 hours during the first year, 604 hours will be used yearly up to the 24th year, and 380 hours on its last year.Schedule of Depreciation Expense is shown below.

PeriodDragon Fruit PlantsConcrete PostsOffice and HousesLighting EquipmentTotal Depreciation Expense

Year 1 January8752,983.91,093.7-4,952.6

February8752,983.91,093.7-4,952.6

March8752,983.91,093.7-4,952.6

April8752,983.91,093.7-4,952.6

May8752,983.91,093.7-4,952.6

June8752,983.91,093.7-4,952.6

July8752,983.91,093.7-4,952.6

August8752,983.91,093.7-4,952.6

September8752,983.91,093.7-4,952.6

October8752,983.91,093.7-4,952.6

November8752,983.91,093.7-4,952.6

December8752,983.91,093.713,627.218,578.9

Year 2 January8752,983.91,093.713,627.218,578.9

February8752,983.91,093.712,308.417,261

March8752,983.91,093.713,627.218,578.9

April8752,983.91,093.713,187.618,140.2

May8752,983.91,093.7-4,952.6

June8752,983.91,093.7-4,952.6

July8752,983.91,093.7-4,952.6

August8752,983.91,093.7-4,952.6

September8752,983.91,093.7-4,952.6

October8752,983.91,093.7-4,952.6

November8752,983.91,093.7-4,952.6

December8752,983.91,093.713,627.218,578.9

Year 310,50035,807.613,12566,377.6125,810.2

Year 410,50035,807.613,12566,377.6125,810.2

Year 510,50035,807.613,12566,377.6125,810.2

Loss on spoilage amounts to .5% of productionPeriodSpoilage in kgFV less cost to sell per kgTotal Amount

Year 1 August25.7100 & 1102,655.7

September25.7100 & 1102,655.7

October25.7100 & 1102,655.7

November25.7100 & 1102,655.7

December22.6120 & 1302,787.3

Year 2 January22.6120 & 1302,787.3

February22.6120 & 1302,787.3

March22.6120 & 1302,787.3

April22.6120 & 1302,787.3

May25.7100 & 1102,655.7

June25.7100 & 1102,655.7

July25.7100 & 1102,655.7

August25.7100 & 1102,655.7

September25.7100 & 1102,655.7

October25.7100 & 1102,655.7

November25.7100 & 1102,655.7

December22.6120 & 1302,787.3

Year 3337.9100/120 & 110/13038,674.3

Year 4412.9100/120 & 110/13044,924.3

Year 5412.9100/120 & 110/13044,924.3

The company will be subject to 30% income tax rate which will be paid 60 days after every quarter for the first three quarter and at the end of the year for the fourth quarter.

Assets The farm site in Burgos with a total area of 30,231.5 m2 cost PhP 3,627,780 at a rate of PhP 120/m2 based on actual selling price of the land.

In each post, four dragon fruit cuttings will be planted with a total number of 20,000 which can be bought at PhP 10.00 each plus 5% contingency rate equals PhP 210,000.

The office and fruit storage room, and grower houses cost PhP 250,000 plus contingency rate of 5% which totals PhP 262,500.

The lighting materials cost for the whole farm is PhP 1,648,447.5 which will be purchased and installed during the 4th quarter of the first year of operations.

Breakdown of cost of Lighting Equipment is shown below.Number of unitsUnit CostAmount

6-watt LED Bulbs4,800200960,000

Rubber Socket4,80045216,000

2 mm2 THHN copper wire205 box (150m per box)1,800369,000

Electrical tape150 rolls253,750

Circuit breaker with case (15A)1700700

Time Setting Device1500500

Labor cost20,00020,000

Contingency5% of total cost78,497.5

Total1,648,447.50

The 5,000 concrete posts cost PhP 716,152.50. The breakdown of cost is shown below.

Number of unitsUnit CostAmount

10 mm Steel bars1,667 pieces150.00250,050.00

Cement834 bags250.00208,500.00

Sand167m3500.0083,500.00

Motorcycle tires5,000 pieces10.0050,000.00

Labor20 carpenters; 15 days300.0090,000.00

Contingency 5% of total cost34,102.5

Total716,152.50

Contingency Rate of 5% will be applied on all fixed asset to be purchased by the company.

Partners Equity Regine Soriano will be investing the land in San Pascual, Burgos, Pangasinan while the remaining three partners will be investing cash sufficient to start the companys operation equally.

Partners, Crishell Fernandez, Jeanette Monterola, Mark Avedon Nevado, and Regine Soriano will all be participating in managing the business and will be sharing equally in profits after applying 12% interest in the beginning capital.

At the end of the second year the company will be distributing cash to partner Regine Soriano to bring her capital equal with others and will have new profit sharing ratio of 25%, 25%, 25% and 25%, respectively.

On the third year and the years thereafter, 50% of their income will be distributed to the partners.

B. Financial Statements (all amounts are stated in Philippine Peso)Total Partners EqutySoriano, CapitalNevado, CapitalMonterola, CapitalFernandez, CapitalPartners EquityTotal AssetsTotal PPEAccum Depn Dragon Fruit PlantsDragon Fruit PlantsAccum Depn Office and HousesOffice and HousesAccum Depn Concrete PostsConcrete PostsAccum Depn Lighting EquiptLighting EquipmentLandProperty, Plant, and EquipmentTotal Current AssetsAccounts Receivable

CashAssetsAs of the Following DateStatement of Financial PositionIgnite Dragon Fruit Farm

(10,500.0)210,000.0(13,125.0)262,500.(35,807.6)716,152.5(13,627.2)1,648,447.5December 31,Year 1

199,500.0249,375.0680,344.91,634,820.33,627,780.0

6,503,031.84,248,892.7751,379.7751,379.7751,379.7751,379.76,503,031.86,391,820.0111,211.611,084.5100,127.1

(21,000.0)210,000.0(26,250.0)262,500.0(71,615.2)716,152.5(80,004.8)1,648,447.5December 31,Year 2

189,000.0236,250.0644,537.31,568,442.73,627,780.0

6,335,558.81,583,889.71,583,889.71,583,889.71,583,889.76,335,558.86,266,010.069,548.811,084.558,464.3

(31,500.00210,000.0(39,375.0)262,500.0(107,422.8)716,152.5(146,382.4)1,648,447.5December 31,Year 3As of the Following DateStatement of Financial PositionIgnite Dragon Fruit Farm

178,500.0223,125.0608,729.71,502,065.13,627,780.0

8,497,785.12,124,446.32,124,446.32,124,446.32,124,446.38,497,785.16,140,199.82,357,585.311,084.52,346,500.8

(42,000.0)210,000.0(52,500.0)262,500.09143,230.4)716,152.5(212,760.0)1,648,447.5December 31,Year 4

168,000210,000572,922.11,435,687.53,627,780.0

11,150,522.32,787,630.62,787,630.62,787,630.62,787,630.611,150,522.36,014,389.65,136,132.711,084.55,125,048.2

(52,500.0)210,000.0(65,625.00262,500.0(179,038.0)716,152.5(279,137.6)1,648,447.5December 31,Year 5

157,500.0196,875.0537,114.51,369,309.93,627,780.0

13,782,134.53,445,533.63,445,533.63,445,533.63,445,533.613,782,134.55,888,579.47,893,555.111,084.57,882,470.6

Comprehensive IncomeIncome Tax (Expense)/BenefitIncome before TaxTotal ExpensesLoss on SpoilageDepreciation ExpenseOperating ExpenseTaxes & LicensesTools ExpensesClearing CostPre-Operating ExpensesLess:Total IncomeGain on Agricultural ProduceGross ProfitCost of Goods SoldSalesFor the Following Period EndedStatement of Comprehensive IncomeIgnite Dragon Fruit Farm

4,952.639,125.024,648.010,000.010,000.011,620.0January 31,Year 1

(70,241.9)30,103.7(100,345.6)(100,345.6)00000

4,952.636,125February 28, Year 1

(28,7854.3)12,323.3(41,077.6)(41,077.6)00000

4,952.639,125.0March 31, Year 1

(30,854.3)13,223.3(44,077.6)(44,077.6)00000

4,952.638,125.0April 30, Year 1

(30,154.3)12,923.3(43,077.6)(43,077.6)00000

4,952.639,125.0May 31, Year 1For the Following Period EndedStatement of Comprehensive IncomeIgnite Dragon Fruit Farm

(30,854.3)13,223.3(44,077.6)(44,077.6)00000

4,952.638,125.0June 30, Year 1

(30154.3)12,923.3(43,077.6)(43,077.6)00000

4,952.639,125.0July 31, Year 1

(30,854.3)13,223.3(44,077.6)(44,077.6)00000

2,655.74,952.666,839.5August 31, Year 1

319,889.6(137,095.6)456,985.2(74,447.8)531,433.0531,433.00(528,777.3)528,777.3

2,655.74,952.665,839.5September 30, Year 1

320,589.6(137,395.6)457,985.2(73,447.8)531,433.0531,433.00(528,777.3)528,777.3

2,655.74,952.666,839.5October 31, Year 1For the Following Period EndedStatement of Comprehensive IncomeIgnite Dragon Fruit Farm

319,589.6(137,095.6)456,985.2(74,447.8)531,433.0531,433.00(528,777.3)528,777.3

2,655.74,952.665,839.5November 30, Year 1

320,589.6(137,395.6)457,985.2(73,447.8)531,433.0531,433.00(528,777.3)528,777.3

2,787.318,578.962,553.5December 31, Year

331,163.4(141,927.2)473,090.6(83,919.7)557,010.3557,010.30(554,223.0)554,223.0

2,787.318,578.996,002.826,036.0January 31, Year 2

289,523.7(124,081.6)413,605.3(143,405.0)557,010.3557,010.30(554,223.0)554,223.0

2,787.317,261.092,852.8February 28, Year 2

310,876.4(133,232.8)444,109.2(112,901.1)557,010.3557,010.30(554,223.0)554,223.0

2,787.318,578.996,002.8March 31, Year 2For the Following Period EndedStatement of Comprehensive IncomeIgnite Dragon Fruit Farm

307,748.9(131,892.4)439,641.3(117,369.0)557,010.3557,010.30(554,223.0)554,223.0

2,787.318,140.294,952.8April 30, Year 2

308,791.0(132,339.0)441,130.0(115,880.3)557,010.3557,010.30(554,223.0)554,223.0

2,655.74,952,670,181.5May 31, Year 2

317,550.2(136,093.0)453,643.2(77,79.8)531,433.0531,433.00(528,777.3)528,777.3

2,655.74,952,669,131.5June 30, Year 2

318,285.2(136,408.0)454,693.2(76739.9)531,433.0531,433.00(528,777.3)528,777.3

2,655.74,952,670,181.5July 31, Year 2For the Following Period EndedStatement of Comprehensive IncomeIgnite Dragon Fruit Farm

317,550.2(136,093.0)453,643.2(77,789.8)531,433.0531,433.00(528,777.3)528,777.3

2,655.74,952,670,181.5August 31, Year 2

317,550.2(136,093.0)453,643.2(77,789.8)531,433.0531,433.00(528,777.3)528,777.3

2,655.74,952,669,131.5September 30, Year 2

318,285.2(136,408.0)454,693.2(76,739.8)531,433.0531,433.00(528,777.3)528,777.3

2,655.74,952,670,181.5October 31, Year 2

317,550.2(136,093.0)453,643.2(77,789.8)531,433.0531,433.00(528,777.3)528,777.3

2,655.74,952,669,131.5November 30, Year 2

318,285.2(136,408.0)454,693.2(76,739.8)531,433.0531,433.00(528,777.3)528,777.3

2,787.318,578.996,002.8December 31, Year 2For the Following Period EndedStatement of Comprehensive IncomeIgnite Dragon Fruit Farm

307,748.9(131,892.4)439,641.3(117,369.0)557,010.3557,010.30(554,223.0)554,223.0

38,674.3125,810.21,067,670.126,619.0December 31,Year 3

4,324,452.6(1,853,336.8)6,177,789.4(1,258,773.6)7,436,563.07,436,563.00(7,397,8888.7)7,397,888.7

44,924.3125,810.21,207,875.227,204.0December 31, Year 4

5,305,474.5(2,273,774.8)7,579,249.3(1,405,813.7)8,985,063.08,985,063.00(8,940,138.7)8,940,138.7

44,924.3125,810.21,268,269.527,167.0December 31, Year 5

5,263,224.4(2,255,667.6)7,518,892.0(1,466,171.0)8,985,063.08,985,063.00(8,940,138.7)8,940,138.7

Cash, endingCash, beginningNet Cash FlowCash provided/used by Financing ActivitiesCash withdrawal of partnersCash investment by partnersFinancing ActivitiesCash used by Investing ActivitiesPurchased Dragon Fruit PlantsConstruction of Office and HousesConstruction of Concrete PostsPurchased Lighting EquipmentInvesting ActivitiesCash provided by Operating ActivitiesIncome Tax PaidCash expensesCash received from customersOperating ActivitiesFor the Following Period EndedStatement of Cash FlowsIgnite Dragon Fruit Farm

1,515,000.0(210,000.0)(262,500.0)(716,152.5)(1,648,447.5)(582,966.1)(653,054.5)2,658,247.7December 31, Year 1

100,127.10100,127.11,515,000.0(2,837,100.0)1,422,227.1

(3,917,214.6)(1,607,033.9)(989,970.5)6,472,556.1December 31, Year 2

58,464.3100,127.1(41,662.9)(3,917,214.6)03,875,5551.8

(2,162,226.3)(1,853,336.8)(1,094,289.1)7,397,888.7December 31, Year 3For the Following Period EndedStatement of Cash FlowsIgnite Dragon Fruit Farm

2,346,500.858,464.32,288,036.5(2,162,226.3)04,450,262.8

(2,652,737.3)(2.273,774.8)(1,235,079.2)8,940,138.7December 31, Year 4

5,125,048.22,346,500.82,778,547.5(2,652,737.3)05,431,284.7

(2,631,612.2)(2,255,667.6)(1,295,436.5)8,940,138.7December 31, Year 5

7,882,470.65,125,048.22,757,422.4(2,631,612.2)05,389,034.6

C. Projected Financial PerformanceBreak-even Point

The company with projected dragon fruit production of 82,581.60 kg which is far beyond the break-even point of 7,385.7 kg will be generating high profit and profit ratio and will have a substantially low risk of operating with a net loss.Return on Investment

In the agriculture industry, the average required return of investors is 18%. Dragon Fruit Industry, in relation to the projected annual return on investment, proves to be more profitable compared to other agricultural business. This high return on investment implies that each asset of the company is properly utilized to generate profit and maximize the wealth of the owners.

Payback Period

The table above shows that after 2.34 years, the cash inflows from operation have equaled the partners capital outlay and that future cash inflows are all returns on their investment.

Net Present Value

In computing the present value factor, the company used 18 % discount rate which is the agriculture industry average rate of return. The positive net present value of the company implies that the investment is really profitable and that investing in this business is a good decision with favorable outcome.

X. Socio-Economic ImpactIgnite Dragon Fruit Farm, in investing in this industry, will help in increasing the current agricultural export of the country that can improve the wealth of the country. Higher export for our country means the total income of the country also becomes higher. Additional jobs will also be available that will reduce the unemployment rate of the country especially in Pangasinan. The wealth of Pangasinan will also be raised because of taxes from the business. And, idle lands in Burgos Pangasinan will become productive with this dragon fruit farming.The societal benefits of the business include healthier living for the consumers of the product, wider knowledge about the benefits and nutrients that this fruit can give especially to those with illness that are seeking for nutritious fruit to mitigate their illness or maintain their health, and higher availability in the market of this limited product.

XI. Conclusion of the StudyAfter thorough study, we conclude that investing in dragon fruit farming industry is feasible and highly beneficial not only to the investors but also to economy, market participants, and overall society. The high profitability and the still growing business opportunities for the industry based on this study proves that organic dragon fruit farming is really the new money-crop of the agriculture sector of the business industry in the Philippines.

Appendix

Health benefits of dragon fruits Dragon fruit is a good natural source of anti-oxidants which help to prevent the dangers of free radicals which can cause cancer and other undesirable health detriments. It is reach in vitamin C. The fruit has a small amount of fats which are mostly the healthy mono-unsaturated fats as, of course, they are not processed in any way and therefore are none of the dangerously unhealthy trans-fats seen in most junk food and processed foods because of the many small seeds on edible part the fruit. Dragon fruit is rich in fibers that help in the digestion of food and in detoxifying harmful chemicals in the colon. Dragon fruit help to lower blood glucose levels in type 2 diabetes. Studies also suggest that the the glucose found in Dragon fruit aids in controlling the blood sugar level for diabetes patients. Dragon fruit helps to control cholesterol level. Dragon fruit is also rich in flavonoids that are known to have favorable effects against cardio related disease. Dragon fruit boosts immune system. Dragon fruit promotes healing of wounds and cuts. Dragon fruit improves appetite. Dragon fruit improves eye sight. Dragon fruit can aid in weight reduction. Dragon fruit improves memory.

ARTICLE OF PARTNERSHIPOFIGNITE DRAGON FRUIT FARM

KNOW BY ALL MEN BY THESE PRESENTS:That, we the undersigned, all of legal age and residents of the Philippines has agreed to form a General Partnership under the terms and condition herein after set forth and subject to provisions of existing laws of the Republic of the Philippines.

AND WE HEREBY CERTIFYArticle I. That the name of the partnership shall be Ignite Dragon Fruit farm.Article II. That the principal office of the partnership shall be located at San Pascual, Burgos, Pangasinan.Article III. That the names, citizenship, and residence of the partners are as follows:Name CitizenshipResidenceCrishell C.FernandezFilipino#340 Matalava, Lingayen, PangasinanJeanette M. MonterolaFilipinoPoblacion, Dasol, PangasinanMark Avedon M. NevadoFilipino250 Malued, Dagupan CityRegine A. SorianoFilipino112 Palaris St., Navatat BasistaArticle IV. That the terms for which said partnership is to exist __ years from the recording of the Securities and Exchange Commission. Article V. That the purposes for said partnership to exist are as follows:1. To increase the production of dragon fruit in the country especially in Pangasinan;2. To conduct business related to dragon fruit farming;and3. To conduct events that will expose dragon fruit in Pangasinan.Article VI. That the capital of this partnership shall be One Million Five Hundred Fifteen Thousand, Philippine Currency and Land worth Three Million Six Hundred Twenty Thousand Seven Hundred Eighty contributed by partners as follows:

NameProperty ContributedAmount ContributedCrishell C. FernandezCash PhP 505,000Jeanette M. MonterolaCash Php 505,000Mark Avedon M. NevadoCash PhP 505,000Regine A. SorianoLand PhP 3,627,780

Article VII. That the partnership profits and losses shall be initially divided as 12% interest on beginning capital and pro rata among the partners on the remainder for the first two years of operation and equally thereafter.Article VIII. That the partners will be serving as the governing board that will be performing the final strategic decisions of the company and shall have the right to inspect the books of the company at the reasonable business hour.Article IX. That the firm shall be under the management of all the partners and as they shall be charge of the management affairs of the partnership.Article X. That the partners undertake to change the name immediately upon receipt of notice or directive from the Securities and Exchange Commission that another partnership, corporation or person has acquired the prior right to the use of that name or that the name has been declared misleading, deceptive, confusingly similar to a registered name, or contrary to public morals, good customs and public policy.

IN WITNESS WHEREOF, we have hereunto set our hands this day ____ of month, year at ______, Philippines.

Crishell C. FernadezJeanette M. MonterolaTINTIN

Mark Avedon M. NevadoRegine A. SorianoTINTIN

ACKNOWLEDGEMENT

Republic of the PhilippinesCity of DagupanBefore me, a Notary Public for and in Dagupan city, Philippines, this ___ day of ___________, personallycame and personally appeared the following persons with their Community Tax Certificates as follows:NameCTC#DatePlace IssuedCrishell C. FernandezJeanette M. MonterolaMark Avedon M. NevadoRegine A. Soriano

Known to be me, the same person who executed the FOREGOING ARTICLE OF PARTNERSHIP, and they acknowledged to me that the same is their voluntary act and deed. WITNESSED MY HAND AND SEAL on the date first above written.

Name of the Legal Counsel

ReferencesMs. Editha Dacuycuy, Owner of Refmad Dragon Fruit Farm - Contact no. +639106926302Evaluation Of Light Bulbs And The Use Of Foliar FertilizerDuring Off-Season Production Of Dragon Fruit pdf file by Leonardo T. Pascua, Maura Luisa S. Gabriel, Marcial Gabriel and Miriam E. Pascua

IFRS amendments to PAS 41 and PAS 16 from ey.com/IFRS issue 84/July 2014The Philippine Organic Act of 1902 Official Gazette of the Republic of the PhilippinesDOST article written by Gleza Rodrigo and Love Grace Campano, ILARRDECBureau of Agricultural Statistics BASCSI, Magic, Nepo, Robinsons purchasing supervisorshttp://www.pinoybisnes.com/agribusiness/dragonfruitproductionguide/

http://tastylandscape.com/2013/07/30/howtogetdragonfruitcactustofruit/http://ilarrdec.mmsu.edu.ph/welcome/news/26/http://www.mb.com.ph/newinkangkonganddragonfruit/http://www.medicalhealthguide.com/articles/dragonfruit-healthbenefits.htmhttps://www.facebook.com/DragonFruitFarmVictoriaTarlac https://businessdiary.com.ph/7595/dragon-fruit-pitaya-production-guide/ http://www.bar.gov.ph/digest-home/digest-archives/80-2005-3rd-quarter/4480-julsep05-dragon-fruithttp://www.philstar.com/agriculture/2013/03/03/915047/dragon-fruit-production-big-income-earner-mmsu

54 | PageC. Fernandez, J. Monterola, M. Nevado, R. SorianoSheet1Total Fixed CostPhP 787,831Sales Mix Contribution Margin106.67Sales Mix Contribution Margin Ratio0.9552Break-Even Point in units7,385.7 kgBreak-Even Point in pesoPhP 824,781.2Sales Mix Contribution Margin = [ (100x7/12+120x5/12)x2/3]+[(110x7/12+130x5/12)x1/3]-5

Sheet1Year 1Year 2Year 3Year 4Year 5Net IncomePhP 1,360,254.1PhP 3,749,745.7PhP 4,324,452.6PhP 5,305,474.5PhP 5,263,224.4Average Investment6,503,0326,419,2957,416,6729,824,15412,466,328ROI20.90%58.41%58.31%54.00%42.22%Average Investment = (Beginning Total Assets + Ending Total Assets)/2

Sheet1Cash FlowInitial Capital Outlay(PhP 5,142,780)Additional Capital Outlay(1,648,448)Total Capital Outlay(6,791,228)Year 1 Cash Inflow1,422,227Year 2 Cash Inflow3,875,552Excess Capital Over 2 Years Cash Flow(1,493,449)Year 3 Cash Inflow4,450,263Payback Period2.34 Years

Sheet1Operating Cash FlowsPresent Value FactorDiscounted AmountYear 1PhP 1,422,227.10.847457627PhP 1,205,277.2Year 23,875,5520.7181844292,783,361Year 34,450,2630.6086308722,708,567Year 45,431,2850.5157888752,801,396Year 55,389,0350.4371092162,355,597Initial Cash Outflow(5,142,780)1(5,142,780)Additonal Investment(1,648,448)0.859227483(1,416,391)Net Present Value5,295,027