A fishing project owned by Sanga family has its investment costs spread over from year 0 -3 as follows;
Tsh. 5 million, Tshs. 2 million, Tshs. 1.5 million and Tshs. 1.0 million respectively. Sanga family expects
to start fishing in year 4 to year 12 where the expected output are 1.5 tons in year 4 and production will
increase steadily annually at 5%.The annual operating costs starting from year4 are Tshs 880,000 and
will increase at 10% annually. It is estimated that, the unit price of fish per kilo will be Tsh. 2,000 and it
will be increasing at a rate of 5% annuallywhile the price of other fish products will be Tshs.800 per
kilogram and willremain constant for the entire life of a project.
Tasks:
(a)Draw up the cash flow for Sanga Family Fishing Project