Mrs. John prepared a six-year project proposal for 1 hectare of land to grow vegetables under irrigated situation. To create irrigation facility she submitted the

Mrs. John prepared a six-year project proposal for 1 hectare of land to grow vegetables under irrigated situation. To create irrigation facility she submitted the developed proposal to the Bank of South Pacific, Agricultural-lending section. The bank agreed to sanction a term loan of $8,000 at the interest rate of 11% per annum. Mrs. John made an initial invest of $8000 on Pump set, which expects annual operational cost of $1000. The expected life of the Pump set would be six years with scrap value of $800. In the project proposal, Mrs. John proposed gross flow of retunes of $6,000 for initial three years and $8,000 from later three years. Using the information given above workout the following;                                   (Each sub-question of 2.5 mark) a. Depreciation of Initial Investment (workout by following Straight line method) b. Discount factor at 11% interest rate c. Net return over operational cost d. Present Value (PV) of the project e. Net Present Value (NPV) of the project f. Benefit Cost Ratio (BCR) of the project and comment on the project feasibility

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