Agribusiness project appraisal and evaluation 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.

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

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%?

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

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

Event times are explained by the earliest event time and latest finish time. With a help of examples provide the difference between the two terms.

Why the knowledge of Total Float is useful in project implementation?

Calculate the value five year hence of a deposit of US$ 1000 made today if the interest rate is

1. 8%
2. 10%
3. 12%
4. 15%

If you deposit $5000 today at 12% interest rate, in how many years (roughly) will the amount grow to 60,000.

At the time of retirement Mr X is given a choice between two alternatives

1. an annual pension of $10000 as long as he lives, and
2. a lump sum amount of $50,000. 

If this X expects to llive for 15 years and interest rate is 15%, which option to be more attractive.