As mentioned above the capital expenses that make up the start up costs of the business venture include costs for accessing the supplies, the raw materials for operations, the cost of the land for office space, plant and manufacturing facilities, funds for acquiring management as well as the investment required to set up a research and development facility. The proposed investment costs are depicted below.
The cost of leasing Land is estimated to be at $1,500,000, while the cost of leasing buildings is forecasted at $1,200,000. The cost of manufacturing machinery was determined to be $1,500,000 while the cost of resources pertaining to management and labor costs is estimated to be at $500,000. Aside from this the cost estimate of the research and development was determined to be at $500,000. The total investment as a result that would be required in the form of startup cost for the business venture would be $5,200,000.