KSB is evaluating two programmes. Both programmes will require an initial investment of GH1,200,000. Funds available to KSB can support only one of the two programmes. The expected cash flows of the two programmes are as follows:

Period	PHD	SHORT COURSES
	(GH)	(GH)
1	160,000	480,000
2	220,000	480,000
3	300,000	120,000
4	440,000	220,000
5	620,000	120,000
6	300,000	120,000
7	220,000	420,000

The required rate of return/opportunity cost of capital of KSB is 20 per cent. The company will invest GH40,000 in working capital in year 3.

Required

As a programme consultant hired by the school, you are supposed to appraise the two programmes and make recommendations (your appraisal should be in a report form) based on the Net Present Value (NPV) Method.