Agribusiness project appraisal and evaluation UE Past Papers Questions.

A farmer borrows $25,000 to buy some additional land. He plans to repay the loan over a 10 year period with 14% interest

1. How much additional income would the farmer need each year to amortize the loan.
2. How much additional income would he need each year to amortize a 20-year loan.

What is the difference?

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UNSOLVED

You borrow $7500 to be repaid in 10 equal semi-annual payments with 12% interest. What size of payment must you make annually.

Answer / Solution

UNSOLVED

What is the PV of $10,000 you will receive five years form today if the discount rate is 10%?

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UNSOLVED

You are offered $800 for woodlot. Your estimate is that the timber will worth about 1,400 in another three years. With a discount rate of 8% and timber harvesting cost in year three is $300 would you take the offer.

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UNSOLVED

A certain farmer in Mbeya region has only 250,000 US$ to invest in and must choose between two farming programmes set below. Using the two tools of agricultural project analysis i.e

1. Payback period and
2. Net present value,

Analyze the two farm programmes. Which farm programme should the farmer invest in and why? (Use 12% as the opportunity cost of capital)

FARM PROGRAMMES

Answer / Solution

UNSOLVED