Fixed Costs - are 6,000 for all operating years. Physical Working Capital Costs - should be based on the following assumptions: Materials - 1.5 month's supply kept in stock Final goods - 1 month's stock kept on average Working Capital - should be estimated on the following assumptions: Accounts receivable - 2.5 months credit allowed before payment due o Accounts payable - 1 month's credit given on materials purchased Using this information, you should answer the following questions to determine whether or not this project acceptable. These answers should be presented under financial analysis session. (a) Prepare an annual statement of costs and benefits (pre-financing). Interpret the results with reference to the relevant theoretical literature. (b) Calculate the Trading and Profit and Loss Account (Income Statement) for the project. Profits are taxable at 20% of annual profit and no tax holiday is available, but earlier losses can be offset against subsequent annual profits where applicable. Using appropriate ratios determine whether the level of profit is acceptable for the selected project? What additional information you would need to make a more informed and critical assessment of the profitability of the project. (c) Critically explain why UNDP should not rely on Payback Period Calculation for decision making Fixed Costs - are 6,000 for all operating years. Physical Working Capital Costs - should be based on the following assumptions: Materials - 1.5 month's supply kept in stock Final goods - 1 month's stock kept on average Working Capital - should be estimated on the following assumptions: Accounts receivable - 2.5 months credit allowed before payment due o Accounts payable - 1 month's credit given on materials purchased Using this information, you should answer the following questions to determine whether or not this project acceptable. These answers should be presented under financial analysis session. (a) Prepare an annual statement of costs and benefits (pre-financing). Interpret the results with reference to the relevant theoretical literature. (b) Calculate the Trading and Profit and Loss Account (Income Statement) for the project. Profits are taxable at 20% of annual profit and no tax holiday is available, but earlier losses can be offset against subsequent annual profits where applicable. Using appropriate ratios determine whether the level of profit is acceptable for the selected project? What additional information you would need to make a more informed and critical assessment of the profitability of the project. (c) Critically explain why UNDP should not rely on Payback Period Calculation for decision making