It is now year 2020. Best-Best Company, a US based company is considering investing in a new project in Tanzania that will have an economic life of four years. The initial investment is estimated at TZS 300 million, including working capital. The net cash flows that project will generate are TZS 120 million per annum for 2021, 2022, and 2023 and TZS 90 million for the year 2024. The terminal value of the project is estimated at TZS 100 million net of tax. The current spot rate for the TZS against the US $ is TZS 2,320. Forecast annual interest rate in Tanzania and USA over four years are expected to be 10% and 5% respectively. The company evaluates Tanzanian projects of similar risks at 14% per annum. The Managing Director of Best-Best Company was recently informed in an investors' conference that international projects are best evaluated by Centralized Capital Budgeting Technique or Decentralized Capital Budgeting. But he is not certain which of the two methods is likely to yield better evaluation results.

REQUIRED:

Evaluate and comment on the financial acceptability of the project using both approaches