The Table 1 below is the financial projections of a cocoa processing project to be established

in Kumasi. The project requires an initial investment of 200 million, after which it is expected

to yield 30 million, 60 million, 100 million, 125 million and 130 million revenues in

st nd rd th th the 1 , 2 , 3 , 4 and 5

questions 1a and 1b below.

Table 1. Cash Flow projections

Year Cash Flow (million ) 0 -200

1 30

2 60

3 100

4 125

5 130

a) Determine the payback period for this investment.

b) Using a discount rate of 25%, determine the:

i. Net Present Value.

ii. Benefit-Cost-Ratio.

2. Discuss the major reasons why agricultural projects fail in Ghana. Page 1 of 1

years of operation respectively. Use the information to answer