Agribusiness project appraisal and evaluation UE Past Papers Questions.

Your uncle Mr. Mtupa in his will wishes to leave you an annual sum of Tsh 10,000,000 a year to meet your living costs once you finish your studies for period of 8 years starting next year . Assuming that an interest rate of 10% how much of his estate must be set aside for this purpose.

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UNSOLVED

Briefly explain why many businesses do not consider risk mitigation in their business?

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1. The table below show net cash flow of two projects which applied loan to NBC Bank. The loan officer has been asked to give out his decision which one is the best project based on NPV. Assume 8% expected interest and rate both projects last for four years.
2. Calculate the IRR for both projects then based on this criterion which project will be favored assuming that the lending rate is 20%?

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What is and why is it important to do sensitivity analysis in project appraisal

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Explain with examples how the following  can be used in doing sensitivity analysis on a project

1. NPV
2. IRR
3. project duration
4. discounting factor

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UNSOLVED