A Chinese investor is to set up a cocounut processing plant in Kwale County. The cost...

 

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A Chinese investor is to set up a cocounut processing plant in Kwale County. The cost of investment will be Kshs 35 million. It will process 1,000 tons of raw nuts p.a, with 80% of these being usable nuts and rest being waste. Raw nuts costs shs 50/kg. The usable nut sells at shs 100/kg and waste is sold at 10/Kg. The plant will use shs 250,000 worth of utilities p.m and shs 500,000 of labour p.m, while repairs and all other costs p.a will be 20% of investment cost. Kshs 2 million, 3 million, and 5 million will be the required payables, stocks and Cash respectively. Annual depeciation will be 10% of investment costs. After 10 years the plant can be sold at 12 million. Develop the cashflow for the investment for the 10 years. Tax rate is 20% WC-p4 Sic A=P () 1-(1+x)-* A=F (1+r)²-1 (9Mks) A Chinese investor is to set up a cocounut processing plant in Kwale County. The cost of investment will be Kshs 35 million. It will process 1,000 tons of raw nuts p.a, with 80% of these being usable nuts and rest being waste. Raw nuts costs shs 50/kg. The usable nut sells at shs 100/kg and waste is sold at 10/Kg. The plant will use shs 250,000 worth of utilities p.m and shs 500,000 of labour p.m, while repairs and all other costs p.a will be 20% of investment cost. Kshs 2 million, 3 million, and 5 million will be the required payables, stocks and Cash respectively. Annual depeciation will be 10% of investment costs. After 10 years the plant can be sold at 12 million. Develop the cashflow for the investment for the 10 years. Tax rate is 20% WC-p4 Sic A=P () 1-(1+x)-* A=F (1+r)²-1 (9Mks)