KSB is evaluating two programmes. Both programmes will require an initial investment of GH¢1,200,000. 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 GH¢40,000 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.