PART B: MANAGING PROJECT FINANCE

$[50$ MARKS$]$

Consider the case study: Investment appraisal: Akwaaba university hostel project, to answer the following questions:

$1.$If the Akwaaba University hostel project were to be financed under a project finance structure, what potential financing roles could the GBS play? Give reasons for your answer

$($hint: refer to the different stakeholders in the project finance structure$).$

$(5)$

$2.$ Why is sensitivity analysis important in this case? $(4)$

$3.$ Explain why it is important to perform a sensitivity analysis using the key variables such as occupation rates, operational cost, inflation and WACC. $(16)$

$4.$ Given the current growth challenges faced by the GBS Fund, do you think it is wise for GBS to undertake this project and finance it under a project finance mechanism or as a direct owner$/$investor$?$ Discuss the merits and demerits of each approach. $(20)$

$5.$ If you were part of the Investment Committee, would you recommend this investment? Provide reasons for your answer. $(5)$

$[$TOTAL: $100$ Marks$]$