Father Saturnino Urios University

ACCOUNTANCY PROGRAM

ENGAGEMENT LETTER

July 27, 2018

Elpsalms David Franco, Proprietor

Franco Photoshoppe and Allied Services
Nasipit, Agusan del Norte

Sir:

As a group of accountancy students from Father Saturnino Urios University, we

look forward to working with you toward the completion of the project feasibility study for
Franco Photoshoppe and Allied Services expansion in Butuan City. The purpose of this
letter is to confirm our understanding of the objectives and scope of the work, approach
to the study, project organization and benefits of the engagement.

Engagement Scope and Objectives

The team will conduct a feasibility study on the expansion of the business to
evaluate the different aspects namely the market, technical, management, financial and
socio-economic aspects concerning the business undertaking.
The study will conclude with a recommendation to the expansion project based
solely on its economic viability. From the services being offered we will only focus on
those which can be availed by the Small, Medium Enterprises or SMEs.

Approach in Conducting the Study

Our approach consists of evaluating the following aspects:

Market Aspect

This aspect discusses the different factors considered in evaluating the

market feasibility of the proposed business. The team will complete a survey to
determine the size of the market and consumer interest. This will also include the
discussion about the demand and market analysis, target market and marketing
strategies. The purpose of this aspect is to determine whether market demand for
the service is sufficient to sustain the proposed business expansion, and to identify
different existing competitors and their market share in the industry.
Technical Aspect

This aspect discusses the technicalities and basic structure of the physical
establishment of the business. This includes the location, building, lease improvement,
equipment, furniture & fixtures, production flow, product pricing and others.

Management Aspect

It presents the organizational structure, mission and vision of the business,

management style, internal controls, entity policies, operation schedule, legality of
operations and its reportorial requirements. Manpower needed will also be determined
and evaluated.

Financial Aspect

This aspect evaluates the result of the other feasibility analysis by preparing
financial statements and other financial analysis. This also contains financial assumptions
and some operating policies specifically relating to cash receipts and cash disbursements
of the business, asset management, and liability management.

Socio-Economic Aspect

In this aspect, it caters the responsibility of the business to the economy,

environment, and society.

Roles of Engagement Team and Client

The team intends to deliver information that is reliable, representative, credible,

and timely to help Franco Photoshoppe and Allied Services complete its due diligence
regarding the feasibility of its business expansion in Butuan City. The consulting team
includes Junbert Paradiang, Marriz Tan, Aian Kit Jasper Sanchez, Judelyn Hesita, James
Lajo and Teofel John Panataleon, Instructor of Management Consultancy Mr. Daniel
Nemeses Espina, CPA, will serve as the advisor for the project. Critical to the success of
the project will be our ability to contact and/or meet with Mr. Elpsalms David Franco on a
regular basis to obtain information and to have questions answered.

Communication

The team will discuss the information gathered with you at a planned meeting.
We will present to you the findings and conclusions at the end of the study. And a copy
will be provided for your use.

Confidentiality
The team will make reasonable efforts to protect any confidential or proprietary
information that you provide. Students and faculty will freely discuss all other information
associated with the project as part of normal educational activities.
Warranty Disclaimer

The project is an educational program designed to help students learn the practice
of business consulting. Students are not, however, considered employees nor agents.
While the team will work in good faith to provide a quality project, there is no promise of
success.

We look forward to working with you on this important endeavor. Please sign below,
evidencing your agreement to, and approval of the terms of this engagement letter.

Sincerely,

_________________________ _________________________

JUNBERT A. PARADIANG MARRIZ B. TAN

_________________________ _________________________

JUDELYN P. HESITA AIAN KIT JASPER Y. SANCHEZ

_________________________ _________________________

JAMES C. LAJO TEOFEL JOHN PANTALEON

Noted by: MR. DANIEL NEMESES ESPINA, CPA

Instructor

Accepted by:

ELPSALMS DAVID FRANCO

Proprietor

Date: ___________________