you didn't answer my question. the questions to be answered are at last 1 -7
Explanation Year 1 Year 2 Year 3 Year 4 Year 5 Oxen for butchery 400 450 150 500 100 Price per ox (on average) Br16,000 Br18,200 Br20,000 Br22,000 Br24,000 Price of meat/kilo Br300 Br340 Br360 Br360 Br400 Price of byproducts/kilo Br100 Br100 Br120 Br120 Br140 Total Human resources Br80,000 Br92,000 Br100,000 Br120,000 Br160,000 costs Utilities expenses (per Br20,000 Br22,000 Br24,000 Br28,000 Br30,000 bill) Miscellaneous expense Br16,000 Br20,000 Br24,000 Br30,000 Br40,000 (including supplies) But there is 25% probability that the above results increase by 20%. The project will maintain the oxen for three months and slaughter them in its own butchery. Each ox will provide 140 kilos of meat and 25 kilos of salable byproducts (including hide). Those that are not salable will be used for bio-fuel generation purpose. 1 To get the oxen fattened, the following composition of feed is essential: Type of feed Kg/cattle/day Cost/kilo (60% Cost/kilo (40% 50% 50% Probability) Probability) prob prob Green matter 3.5 4 Br3.00 Br4.00 Concentrate 6 Br12.00 Br13.00 There is 70% probability that the project will be financed by generating 30% capital from the owner and the remaining from bank loan to be repaid over the term of the project in equal annual installments plus interest on the unpaid balance at 12% rate. But there is still 30% probability that the project will be financed by 50% equity and 50% bank loan to be repaid over the term of the project in equal annual installments plus interest on the unpaid balance at 14% rate. Assume no receivables and payables. The project's risk adjusted cost of capital is 20%. Additional Information . Prefeasibility and feasibility study costs of Br120,000 were incurred and will be amortized over 5 years. The project needs the following minimum balances on hand throughout the life of the project: a. cash balance of Br150,000 per month with 80% probability and Br130,000 with 20% probability b. Inventory of oxen of the first quarter c. Cattle feed stock of 3 months d. Supplies of Br6,000 per month with 100% probability . Annual interest payments on debt used to finance this project would be a tax deductible expense. Tax rate is 30%. . Project's life is assumed to be 5 years. Required: 1. Determine the investment cost of the project 2. Determine the relevant cash inflows of the project for each of the five years 3. Determine the relevant cash outflows of the project for each of the five years 4. Prepare the projected income statement for each of the five years 5. Determine the net cash flows of the project for each of the five years 6. Evaluate the feasibility of the project using a. Payback period method where the acceptable time limit is 2 years b. NPV C. IRR 7. What social benefits and costs will be expected from such project
