An agribusiness entrepreneur wishes to venture into feed processing for cattle in Monze. The value of the processing machinary is estimated at K460,000 including transportation costs. The shelter for the mill is estimated to cost about K84,000. The ownership costs are as follows:
(a) depreciation is at 5% per year of initial value
(b) insurance is 2.5% per year of initial value
(c) capital costs per year are K22,000
The management costs per year are as follows:
(a) salaries K280,000
(b) water and electricity K40,000
(c) sandry expenses K22,000
(d) fuel K105,000
The running costs per tonne of feed produced are as follows
(i) maize grain K2,400
(ii) soyabean K1,100
(iii) sunflower K1,000
(iv) wages K400
(v) others K850
The revenues per tonne of feed are estimated at K7,640
The additional information is that the 45% of finance for the business will be sources from the bank at interest of 25% per annum. And the loan is payable over an 8 year period at simple interest. The inflation on production costs and revenues is estiamted at 10%.
You are required to prepare annual:
(a) preliminary and final planning budget for this entrepreneur per year for 8 years
(b) cashflows for 8 years
(c) production accounts for 8 years
(d) income statemets for 8 years
(e) balance sheets for 8 years
(f) success patterns for 8 years

Answer rating: 100% (QA)

a Preliminary Planning Budget for Agribusiness Entrepreneur Year 1 Capital costs K22000 Management costs Salaries K280000 Water and electricity K40000 Sandy expenses K22000 Fuel K105000 Running costs ... View the full answer