R&B Co. Ltd. is planning to build market stores on a Build-Operate-Transfer (BOT) arrangement for the Sunyani Municipal Assembly. The total cost of the project is estimated at GHȼ 450, 650.00. The estimated monthly net operating income (NOI) for the investment is GHS3, 500.00 with operating period of 15 years after which the stores would be transferred to the Assembly.

a. With a detailed numerical analysis, explain the financial justification for this investment given that GoG’s one-year Treasury bill rate is 24% p.a.

b. Given that inflation will average 12% over the next fifteen years, show (numerically) how the investor may replicate the same project for another assembly at the end of the fifteen years, without using loan, if money can be invested at 24% p.a.

c. Analyse the feasibility of your recommended approach in c using the project’s NOI.