Your organization support vulnerable communities and has initiated project for small scale farmers that may help the community fight poverty. The supply of agro inputs looks promising and you have been asked to appraise this new investment. The investment pilot phase will last for six (6) years before scaling it up and the companys cost of capital and required rate of return is 20 percent. The following information has been presented on the investment.

• The initial cost of the investment is estimated at ZMW600, 000 with Zero scrap value.
• Depreciation is ZMW 100,000 per annum
• Tax is 20% of the profit before tax while losses are not taxable.
• Projections on the project are as follows in (ZMW 000) which is to be completed for the project as highlighted by **** :

Years	1	2	3	4	5	6
Revenues	800	600	700	900	950	1,300
Operating Expense	(720)	(450)	(550)	(600)	(720)	(850)
Depreciation ****
Profit before Tax****
Taxation 20%****
Net profit after Tax****

Required

1. Complete the table and calculate the net profit or loss from year 1-6. ( 5 Marks)
2. Appraise the project using Accounting Rate of Return and Net Present Value Methods after which advise the board on the viability of this project. (12 Marks)
3. What other factors should be taken into account for a project of this nature.