Time Value of Money

Topics: Laundry, Machine, Clothes dryer Pages: 3 (747 words) Published: April 11, 2013

Gauhar Bidani is a budding entrepreneur. He has done well in his trading business and is now planning to go into manufacturing. As his trading business was in geysers, cooking ovens and similar consumer durables, he decides to go in for manufacturing washing machines which also falls under consumer durables.

Gauhar Bidani is a know all and when somebody asked him whether he was confident of manufacturing washing machines, he laughed and said ‘What is there in it, just a container with a stirrer and a motor, and input and output water pipes. You know I always had a mechanical bent as a child and now I will finally use my skills to design and produce a washing machine. It is simple’.

His father asked him how much land would be required. ‘Not much Daddy, after all it is simple fabrication. Our shed in Sahibabad should be good enough’.

‘But that is only 3000 sq ft’, queried Daddy.

‘Yes, but that is good enough. After all what is the size of a washing machine-3ft X 2ft X 2ft. 500 machines can come in that area while I am planning only 200 machines per day’.

Bidani’s uncle, who was to be one of the investors, was full of doubts.

‘Bidani, have you examined the technical aspects in detail. All washing machines are not doing well in the market you know. Sometimes the clothes are not clean, sometimes not dried and some machines have lot of breakdown problems’.

‘Yes uncle, don’t worry, your investment is safe. My washing machine will sell in the market’.

‘Bidani, which washing machine are you planning-manual, semi automatic or fully automatic. Will it have a dryer. What sizes of capacity will you offer? What colour choices?

‘Oh, come on uncle. You are doubting me now. I will make fully automatic machines in one colour only with a microprocessor chip inside. Just wait and see my results. Be patient’.

After 12 months Bidani came up with a fully automatic machine in black colour. To his uncle the...
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