FEASIBILITY STUDY PRESENTED TO THE FEDERAL REPUBLIC OF NIGERIA | Farm Energy

FEASIBILITY STUDY PRESENTED TO THE FEDERAL REPUBLIC OF NIGERIA  | Farm Energy

FEASIBILITY STUDY PRESENTED TO THE FEDERAL REPUBLIC OF NIGERIA  | Farm Energy - feasibility study of laundry shop, feasibility study of duck egg production, feasibility study of a restaurant, feasibility study of car wash business,feasibility study of water refilling station,feasibility study of the project,free sample of feasibility study of bakeshop, feasibility study of computer shop.

Introduction

The shift in peoples dietary intake of meat especially red meat to fish due to increasing awareness of its low cholesterol level and the unsaturated fatty acid composition coupled with the ever increasing population has led to the increase demand for fish. 

This demand inspite of the combined efforts from both industrial trawling vessels and the artisan fisheries, the demand cannot be met with the supply from these sources; this is as a result of depleting stock in the natural water bodies due to over fishing and the devastating effects of pollution in our water bodies
FEASIBILITY STUDY PRESENTED TO THE FEDERAL REPUBLIC OF NIGERIA  | Farm Energy

The available alternatives to argument this short fall in supply are aquaculture and import. The Later should be discouraged because for a country that is trying to improve on its foreign reserve like ours to make such an attempt is unwise and uneconomical. We are now left with the only option which is aquaculture.

Feasibility takes into consideration the practicability of a project while viability dwells on, will the benefit of the project justify the cost? The benefit of the project as shown below in this proposal justifies the cost. The location is just out sketch of Minna town Korokpon to be précised with a distance of less than Five (5) Kilometers to the ADP fish hatchery where fingerlings could be source easily.
It proximity to the high way is also a good advantage as travelers who are interested will stop over to make some purchases because a conspicuous sign post that will be placed by the roadside. There is high probability of increasing demand in the future.

PROJECT LOCATION

The fish farm is to be located on a village land, located along Minna Suleja Road, Korokpon Village after chanchaga Minna Niger State. Factors considered

IN THE PROPOSED LOCATION

(Feasibility and viability)

The Chanchaga water works drainage is an added advantage for the healthy Aquaculture; this will also ensure all season farming.

· Topography: The slope of the land is the type that permits easy drainage of water in and out of the pond especially from the Chanchaga Water works drainage aside the well that sank to ensure higher production and expansion of fish farm in the future.

· Water: The physical-chemical and biological analysis of the well water and the Chanchaga drainage located near the site support fish culture

· Accessibility: The location is easily accessible close to the main express way of Minna Suleja Road just after Chanchaga make transfer of raw materials easier proximity to hotels and university domiciled within the capital city of Minna is a good advantage for easy marketing.

· Marketing: There is high demand for fish, especially mudfish by the inhabitants of the area, University Community, hotels, restaurants and fish barbecue centers across the Minna metropolis and beyond.

OBJECTIVE OF THE PROJECT PROPOSAL

· A technical guids to investment in fish farm project

· This will serve as a technical guide in the proposed farm

· The proposed fish farm is supposed to be stocked with 1,000 fingerlings two times in a year with available 3 concrete ponds measuring 5mx2mx1.5m.

Cat fish, Clarias gariepenus which is in high demand in the location the fish is to be cultured.

ASSUMPTIONS

· Mortality is put at 2% with the proper nutrition and management practice.

· The fish can be raised to table size two times in a year. Fish is supposed to gain an average weight of 1kg at the end of every six (6) months.

· A kilogram of fish will sell at the rate of N400 or N500

CAPITAL INVESTMENT

The total capital investment is about seven million (N7000,000) Infrastructures cost about N3,500000M while recurrent cost is about N2930,000 one million nine hundred and thirty thousand naira.

AMOUNT OF LOAN REQUIRED

Loan of about N5 Million at interest of 10% is require for the project while the remaining N2000,000 is the equity investment.

LOAN REPAYMENT PLAN

The even principal repayments with interest i.e the total loan sum divided by the number of years paid along with interest.


Year

Initial Balance

Interest Rate 10%

Principal Repayment

Total Repayment

15,000,000

500,000

1,000,000

1,500,000


2 350,000

350,000

1,000,000

1,350,000


3

2,500,000

250,000

1,000,000

1,250,000


4

1,500,000

150,000

1,000,000

1,150,000


5

500,000

50,000

1,000,000

1,060,000




MANAGEMENT

The farm staff strength is going to comprise of a farm manager who should be a graduate of fisheries with a minimum of 1 year farm experience. He/she is to be paid a salary of N360,000 per annum. The Manager is to be assisted by a farm attendant who must posses a Diploma and the farm Security both to be paid a salary of N180,000 per annum each depreciation of two deep freezer at 20% initial value N400,000 salvage value 0.2x400,000

D 400,000 – 80,000 = N80,000

5 = N64,000


Year

Annual Depreciation

Remaining Value


1

64,000

336,000


2

64,000

272,000


3

64,000

208,000


4

64,000

144,000


5

64,000

80,000


Depreciation on over head tank and pumping machine at 10%

Initial Value = N160,000

Salvage = N160,000

= N16,000

Depreciation = 160,000 – 160,000

5

= 28,800


Year

Annual Depreciation

Remaining Value


1

28,800

131,200


2

28,800

120,400


3

28,800

73,600


4

28,800

44,800


5

28,800

16,000

Depreciation on Generator at 10%

Initial Value = 100,000

Salvage = 0.1x100,000

= 10,000

Depreciation = 100,000 – 10,000

5

18,000


Year

Annual Depreciation

Remaining Value


1

18,000

82,000


2

18,000

64,000


3

18,000

46,000


4

18,000

28,000


5

18,000

10,000


Fixed Cost - 540,000

Land - 1,200,000

Pond - 900,000

Well - 300,000

Office/Farm - 400,000

Deep Freezer - 400,000

Generator - 100,000

Overhead tank and pump - 160,000

Recurrent cost - 2,700,000

Fingerlings - 240,000 per year

- 1,200,000 for 5 years

Feeds - 2,014,000

Fuel 10 lit/day - 261,000

PHC Bill - 60,000

Salaries - 540,000

Machinery - 100,000

Depreciation on land asset at 10%

Initial Value 1,200,000

Salvage Value = 0.1x1,200,000

120,000

D = P – S

N = 1,200,000 – 120,000

5

= 216,000

Year

Annual Depreciation

Remaining Value

1

216,000

984,000


2

216,000

764,000


3

216,000

552,000


4

216,000

336,000


5

216,000

120,000

Depreciation of pond at 10%

Initial amount = 900,000

Salvage Value = 0.1x 900,000

D = P-S = 90,000 – 90,000

5

N = 162,000


Year

Annual Depreciation

Remaining Value


1

162,000

738,000


2

162,000

576,000


3

162,000

414,000


4

162,000

252,000


5

162,000

90,000

Depreciation of well at 5%

Initial Amount = N450,000

Salvage Value = 0.05 x 450,000

= 22,500

D = 450,000 - 22,500

5 = N85,500

Year

Annual Depreciation

Remaining Value


1

85,500

364,500


2

85,500

279,000


3

85,500

193,500


4

85,500

108,000


5

85,500

22,500


DEPRECIATION OF OFFICE (FARM HOUSE) 
Initial Value = N300,000

Salvage Value = 0.1 x 300,000

D = 300,000 – 30,000

5

=54,000

Year

Annual Depreciation

Remaining Value


1

54,000

246,000


2

54,000

192,000


3

54,000

138,000


4

54,000

84,000


5

54,000

30,000


CASH FLOW ANALYSIS


Year

1

2

3

4

5


Sales

4,352,000

3,352,000

3,352,000

3,352,000

3,352,000


Land

216,000

216,000

216,000

216,000

216,000


Pond

162,000

162,000

162,000

162,000

162,000


Well

85,500

85,500

85,500

85,500

85,500


Farm House

54,000

54,000

54,000

54,000

54,000

Over head Tank Pump

28,800

28,800

28,800

28,800

28,800

Generator

18,000

18,000

18,000

18,000

18,000

Deep freezer

64,000

64,000

64,000

64,000

64,000

Finger lings

240,000

240,000

240,000

240,000

240,000

Feeds

2,014,000

2,014,000

2,014,000

2,014,000

2,014,000

Fuel

261,000

261,000

261,000

261,000

261,000

PHC Bill

60,000

60,000

60,000

60,000

60,000


Salary

540,000

540,000

540,000

540,000

540,000

Miscel.

80,000

80,000

80,000

80,000

80,000

Gross profit

789,700

789,700

789,700

789,700

789,700

Net profit

750,215

750,215

750,215

750,215

750,215

EVALUATION OF THE PROJECT

There are various methods that can be used but the most appropriate for this project are the pay back period, Net present value and the Benefit cost ratio methods.

1. Payback Period

The project has an even cash flow of 4,352,000 each year for the 5 years period, on an investment amount of 5,000,000.

Payback period = Initial fixed investment

Annual cash flows

= 3,716,000

2,352,000

= 1.57

Payback period is the period of time taken before the capital in a project; the working capital is fully recovered.

In this study, the estimated payback period is approximately 1 ½ year. In view of the time of the project and amount involved the payback period is considered attractive and acceptable.

1. Net Present Value: Net present value is the classic economic method for evaluation and investment proposal like this.

NPV= n{ At ----C

t =0 (1+r)t

Where r = interest

C = present value of cash flow

Or initial capital investment

At = Cash inflow at time t

t = time in year

Net present Value = £ Discount factor 1 present Value –C

(1+r)n

Year cash flow discount factor present value

0 1 2,352,000 0.909 2,116,800

2 235,200 0.826 1,942,752

3 235200 0.751 1766352

4 235200 0.68 1599360

5 235200 0.62 1456240

8897731

NPV = 8,897,731-3,716,000

5,181,731

The Net present value is positive, so the project is acceptable. It means the rate of turn over exceed that minimum required rate of return

Benefit cost Ration

Cash inflow for 5 years = 4,352,000 x 5

= 21,760,000 (Benefit)

Cost = fixed cost + variable cost

= 26,112,000

B/c >I. So the project is acceptable.

RECOMMENDATIONS

The project based on the above evaluation method is economically viable and technically feasible. I hereby recommend strongly the implementation of this proposed project.

REFERENCES

1 Haruna A.B (2003) Aquaculture in the Tropics Theory and practice, pp 248-251.

2 Tiamiyu L.O (2002) Fisheries Economics Lecture Note, University of Agriculture Makurde

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FEASIBILITY STUDY PRESENTED TO THE FEDERAL REPUBLIC OF NIGERIA  | Farm Energy

FEASIBILITY STUDY PRESENTED TO THE FEDERAL REPUBLIC OF NIGERIA  | Farm Energy - feasibility study of laundry shop, feasibility study of duck egg production, feasibility study of a restaurant, feasibility study of car wash business,feasibility study of water refilling station,feasibility study of the project,free sample of feasibility study of bakeshop, feasibility study of computer shop.

Introduction

The shift in peoples dietary intake of meat especially red meat to fish due to increasing awareness of its low cholesterol level and the unsaturated fatty acid composition coupled with the ever increasing population has led to the increase demand for fish. 

This demand inspite of the combined efforts from both industrial trawling vessels and the artisan fisheries, the demand cannot be met with the supply from these sources; this is as a result of depleting stock in the natural water bodies due to over fishing and the devastating effects of pollution in our water bodies
FEASIBILITY STUDY PRESENTED TO THE FEDERAL REPUBLIC OF NIGERIA  | Farm Energy

The available alternatives to argument this short fall in supply are aquaculture and import. The Later should be discouraged because for a country that is trying to improve on its foreign reserve like ours to make such an attempt is unwise and uneconomical. We are now left with the only option which is aquaculture.

Feasibility takes into consideration the practicability of a project while viability dwells on, will the benefit of the project justify the cost? The benefit of the project as shown below in this proposal justifies the cost. The location is just out sketch of Minna town Korokpon to be précised with a distance of less than Five (5) Kilometers to the ADP fish hatchery where fingerlings could be source easily.
It proximity to the high way is also a good advantage as travelers who are interested will stop over to make some purchases because a conspicuous sign post that will be placed by the roadside. There is high probability of increasing demand in the future.

PROJECT LOCATION

The fish farm is to be located on a village land, located along Minna Suleja Road, Korokpon Village after chanchaga Minna Niger State. Factors considered

IN THE PROPOSED LOCATION

(Feasibility and viability)

The Chanchaga water works drainage is an added advantage for the healthy Aquaculture; this will also ensure all season farming.

· Topography: The slope of the land is the type that permits easy drainage of water in and out of the pond especially from the Chanchaga Water works drainage aside the well that sank to ensure higher production and expansion of fish farm in the future.

· Water: The physical-chemical and biological analysis of the well water and the Chanchaga drainage located near the site support fish culture

· Accessibility: The location is easily accessible close to the main express way of Minna Suleja Road just after Chanchaga make transfer of raw materials easier proximity to hotels and university domiciled within the capital city of Minna is a good advantage for easy marketing.

· Marketing: There is high demand for fish, especially mudfish by the inhabitants of the area, University Community, hotels, restaurants and fish barbecue centers across the Minna metropolis and beyond.

OBJECTIVE OF THE PROJECT PROPOSAL

· A technical guids to investment in fish farm project

· This will serve as a technical guide in the proposed farm

· The proposed fish farm is supposed to be stocked with 1,000 fingerlings two times in a year with available 3 concrete ponds measuring 5mx2mx1.5m.

Cat fish, Clarias gariepenus which is in high demand in the location the fish is to be cultured.

ASSUMPTIONS

· Mortality is put at 2% with the proper nutrition and management practice.

· The fish can be raised to table size two times in a year. Fish is supposed to gain an average weight of 1kg at the end of every six (6) months.

· A kilogram of fish will sell at the rate of N400 or N500

CAPITAL INVESTMENT

The total capital investment is about seven million (N7000,000) Infrastructures cost about N3,500000M while recurrent cost is about N2930,000 one million nine hundred and thirty thousand naira.

AMOUNT OF LOAN REQUIRED

Loan of about N5 Million at interest of 10% is require for the project while the remaining N2000,000 is the equity investment.

LOAN REPAYMENT PLAN

The even principal repayments with interest i.e the total loan sum divided by the number of years paid along with interest.


Year

Initial Balance

Interest Rate 10%

Principal Repayment

Total Repayment

15,000,000

500,000

1,000,000

1,500,000


2 350,000

350,000

1,000,000

1,350,000


3

2,500,000

250,000

1,000,000

1,250,000


4

1,500,000

150,000

1,000,000

1,150,000


5

500,000

50,000

1,000,000

1,060,000




MANAGEMENT

The farm staff strength is going to comprise of a farm manager who should be a graduate of fisheries with a minimum of 1 year farm experience. He/she is to be paid a salary of N360,000 per annum. The Manager is to be assisted by a farm attendant who must posses a Diploma and the farm Security both to be paid a salary of N180,000 per annum each depreciation of two deep freezer at 20% initial value N400,000 salvage value 0.2x400,000

D 400,000 – 80,000 = N80,000

5 = N64,000


Year

Annual Depreciation

Remaining Value


1

64,000

336,000


2

64,000

272,000


3

64,000

208,000


4

64,000

144,000


5

64,000

80,000


Depreciation on over head tank and pumping machine at 10%

Initial Value = N160,000

Salvage = N160,000

= N16,000

Depreciation = 160,000 – 160,000

5

= 28,800


Year

Annual Depreciation

Remaining Value


1

28,800

131,200


2

28,800

120,400


3

28,800

73,600


4

28,800

44,800


5

28,800

16,000

Depreciation on Generator at 10%

Initial Value = 100,000

Salvage = 0.1x100,000

= 10,000

Depreciation = 100,000 – 10,000

5

18,000


Year

Annual Depreciation

Remaining Value


1

18,000

82,000


2

18,000

64,000


3

18,000

46,000


4

18,000

28,000


5

18,000

10,000


Fixed Cost - 540,000

Land - 1,200,000

Pond - 900,000

Well - 300,000

Office/Farm - 400,000

Deep Freezer - 400,000

Generator - 100,000

Overhead tank and pump - 160,000

Recurrent cost - 2,700,000

Fingerlings - 240,000 per year

- 1,200,000 for 5 years

Feeds - 2,014,000

Fuel 10 lit/day - 261,000

PHC Bill - 60,000

Salaries - 540,000

Machinery - 100,000

Depreciation on land asset at 10%

Initial Value 1,200,000

Salvage Value = 0.1x1,200,000

120,000

D = P – S

N = 1,200,000 – 120,000

5

= 216,000

Year

Annual Depreciation

Remaining Value

1

216,000

984,000


2

216,000

764,000


3

216,000

552,000


4

216,000

336,000


5

216,000

120,000

Depreciation of pond at 10%

Initial amount = 900,000

Salvage Value = 0.1x 900,000

D = P-S = 90,000 – 90,000

5

N = 162,000


Year

Annual Depreciation

Remaining Value


1

162,000

738,000


2

162,000

576,000


3

162,000

414,000


4

162,000

252,000


5

162,000

90,000

Depreciation of well at 5%

Initial Amount = N450,000

Salvage Value = 0.05 x 450,000

= 22,500

D = 450,000 - 22,500

5 = N85,500

Year

Annual Depreciation

Remaining Value


1

85,500

364,500


2

85,500

279,000


3

85,500

193,500


4

85,500

108,000


5

85,500

22,500


DEPRECIATION OF OFFICE (FARM HOUSE) 
Initial Value = N300,000

Salvage Value = 0.1 x 300,000

D = 300,000 – 30,000

5

=54,000

Year

Annual Depreciation

Remaining Value


1

54,000

246,000


2

54,000

192,000


3

54,000

138,000


4

54,000

84,000


5

54,000

30,000


CASH FLOW ANALYSIS


Year

1

2

3

4

5


Sales

4,352,000

3,352,000

3,352,000

3,352,000

3,352,000


Land

216,000

216,000

216,000

216,000

216,000


Pond

162,000

162,000

162,000

162,000

162,000


Well

85,500

85,500

85,500

85,500

85,500


Farm House

54,000

54,000

54,000

54,000

54,000

Over head Tank Pump

28,800

28,800

28,800

28,800

28,800

Generator

18,000

18,000

18,000

18,000

18,000

Deep freezer

64,000

64,000

64,000

64,000

64,000

Finger lings

240,000

240,000

240,000

240,000

240,000

Feeds

2,014,000

2,014,000

2,014,000

2,014,000

2,014,000

Fuel

261,000

261,000

261,000

261,000

261,000

PHC Bill

60,000

60,000

60,000

60,000

60,000


Salary

540,000

540,000

540,000

540,000

540,000

Miscel.

80,000

80,000

80,000

80,000

80,000

Gross profit

789,700

789,700

789,700

789,700

789,700

Net profit

750,215

750,215

750,215

750,215

750,215

EVALUATION OF THE PROJECT

There are various methods that can be used but the most appropriate for this project are the pay back period, Net present value and the Benefit cost ratio methods.

1. Payback Period

The project has an even cash flow of 4,352,000 each year for the 5 years period, on an investment amount of 5,000,000.

Payback period = Initial fixed investment

Annual cash flows

= 3,716,000

2,352,000

= 1.57

Payback period is the period of time taken before the capital in a project; the working capital is fully recovered.

In this study, the estimated payback period is approximately 1 ½ year. In view of the time of the project and amount involved the payback period is considered attractive and acceptable.

1. Net Present Value: Net present value is the classic economic method for evaluation and investment proposal like this.

NPV= n{ At ----C

t =0 (1+r)t

Where r = interest

C = present value of cash flow

Or initial capital investment

At = Cash inflow at time t

t = time in year

Net present Value = £ Discount factor 1 present Value –C

(1+r)n

Year cash flow discount factor present value

0 1 2,352,000 0.909 2,116,800

2 235,200 0.826 1,942,752

3 235200 0.751 1766352

4 235200 0.68 1599360

5 235200 0.62 1456240

8897731

NPV = 8,897,731-3,716,000

5,181,731

The Net present value is positive, so the project is acceptable. It means the rate of turn over exceed that minimum required rate of return

Benefit cost Ration

Cash inflow for 5 years = 4,352,000 x 5

= 21,760,000 (Benefit)

Cost = fixed cost + variable cost

= 26,112,000

B/c >I. So the project is acceptable.

RECOMMENDATIONS

The project based on the above evaluation method is economically viable and technically feasible. I hereby recommend strongly the implementation of this proposed project.

REFERENCES

1 Haruna A.B (2003) Aquaculture in the Tropics Theory and practice, pp 248-251.

2 Tiamiyu L.O (2002) Fisheries Economics Lecture Note, University of Agriculture Makurde

RELATED SEARCH

Above all,, we believe this article,(Top Five Drinks That Help You Lose Weight) was interesting,if yes, don.t hesitate using our share button below to inform - friends and relations via Facebook twitter or google plus

FEASIBILITY STUDY PRESENTED TO THE FEDERAL REPUBLIC OF NIGERIA  | Farm Energy

FEASIBILITY STUDY PRESENTED TO THE FEDERAL REPUBLIC OF NIGERIA  | Farm Energy - feasibility study of laundry shop, feasibility study of duck egg production, feasibility study of a restaurant, feasibility study of car wash business,feasibility study of water refilling station,feasibility study of the project,free sample of feasibility study of bakeshop, feasibility study of computer shop.

Introduction

The shift in peoples dietary intake of meat especially red meat to fish due to increasing awareness of its low cholesterol level and the unsaturated fatty acid composition coupled with the ever increasing population has led to the increase demand for fish. 

This demand inspite of the combined efforts from both industrial trawling vessels and the artisan fisheries, the demand cannot be met with the supply from these sources; this is as a result of depleting stock in the natural water bodies due to over fishing and the devastating effects of pollution in our water bodies
FEASIBILITY STUDY PRESENTED TO THE FEDERAL REPUBLIC OF NIGERIA  | Farm Energy

The available alternatives to argument this short fall in supply are aquaculture and import. The Later should be discouraged because for a country that is trying to improve on its foreign reserve like ours to make such an attempt is unwise and uneconomical. We are now left with the only option which is aquaculture.

Feasibility takes into consideration the practicability of a project while viability dwells on, will the benefit of the project justify the cost? The benefit of the project as shown below in this proposal justifies the cost. The location is just out sketch of Minna town Korokpon to be précised with a distance of less than Five (5) Kilometers to the ADP fish hatchery where fingerlings could be source easily.
It proximity to the high way is also a good advantage as travelers who are interested will stop over to make some purchases because a conspicuous sign post that will be placed by the roadside. There is high probability of increasing demand in the future.

PROJECT LOCATION

The fish farm is to be located on a village land, located along Minna Suleja Road, Korokpon Village after chanchaga Minna Niger State. Factors considered

IN THE PROPOSED LOCATION

(Feasibility and viability)

The Chanchaga water works drainage is an added advantage for the healthy Aquaculture; this will also ensure all season farming.

· Topography: The slope of the land is the type that permits easy drainage of water in and out of the pond especially from the Chanchaga Water works drainage aside the well that sank to ensure higher production and expansion of fish farm in the future.

· Water: The physical-chemical and biological analysis of the well water and the Chanchaga drainage located near the site support fish culture

· Accessibility: The location is easily accessible close to the main express way of Minna Suleja Road just after Chanchaga make transfer of raw materials easier proximity to hotels and university domiciled within the capital city of Minna is a good advantage for easy marketing.

· Marketing: There is high demand for fish, especially mudfish by the inhabitants of the area, University Community, hotels, restaurants and fish barbecue centers across the Minna metropolis and beyond.

OBJECTIVE OF THE PROJECT PROPOSAL

· A technical guids to investment in fish farm project

· This will serve as a technical guide in the proposed farm

· The proposed fish farm is supposed to be stocked with 1,000 fingerlings two times in a year with available 3 concrete ponds measuring 5mx2mx1.5m.

Cat fish, Clarias gariepenus which is in high demand in the location the fish is to be cultured.

ASSUMPTIONS

· Mortality is put at 2% with the proper nutrition and management practice.

· The fish can be raised to table size two times in a year. Fish is supposed to gain an average weight of 1kg at the end of every six (6) months.

· A kilogram of fish will sell at the rate of N400 or N500

CAPITAL INVESTMENT

The total capital investment is about seven million (N7000,000) Infrastructures cost about N3,500000M while recurrent cost is about N2930,000 one million nine hundred and thirty thousand naira.

AMOUNT OF LOAN REQUIRED

Loan of about N5 Million at interest of 10% is require for the project while the remaining N2000,000 is the equity investment.

LOAN REPAYMENT PLAN

The even principal repayments with interest i.e the total loan sum divided by the number of years paid along with interest.


Year

Initial Balance

Interest Rate 10%

Principal Repayment

Total Repayment

15,000,000

500,000

1,000,000

1,500,000


2 350,000

350,000

1,000,000

1,350,000


3

2,500,000

250,000

1,000,000

1,250,000


4

1,500,000

150,000

1,000,000

1,150,000


5

500,000

50,000

1,000,000

1,060,000




MANAGEMENT

The farm staff strength is going to comprise of a farm manager who should be a graduate of fisheries with a minimum of 1 year farm experience. He/she is to be paid a salary of N360,000 per annum. The Manager is to be assisted by a farm attendant who must posses a Diploma and the farm Security both to be paid a salary of N180,000 per annum each depreciation of two deep freezer at 20% initial value N400,000 salvage value 0.2x400,000

D 400,000 – 80,000 = N80,000

5 = N64,000


Year

Annual Depreciation

Remaining Value


1

64,000

336,000


2

64,000

272,000


3

64,000

208,000


4

64,000

144,000


5

64,000

80,000


Depreciation on over head tank and pumping machine at 10%

Initial Value = N160,000

Salvage = N160,000

= N16,000

Depreciation = 160,000 – 160,000

5

= 28,800


Year

Annual Depreciation

Remaining Value


1

28,800

131,200


2

28,800

120,400


3

28,800

73,600


4

28,800

44,800


5

28,800

16,000

Depreciation on Generator at 10%

Initial Value = 100,000

Salvage = 0.1x100,000

= 10,000

Depreciation = 100,000 – 10,000

5

18,000


Year

Annual Depreciation

Remaining Value


1

18,000

82,000


2

18,000

64,000


3

18,000

46,000


4

18,000

28,000


5

18,000

10,000


Fixed Cost - 540,000

Land - 1,200,000

Pond - 900,000

Well - 300,000

Office/Farm - 400,000

Deep Freezer - 400,000

Generator - 100,000

Overhead tank and pump - 160,000

Recurrent cost - 2,700,000

Fingerlings - 240,000 per year

- 1,200,000 for 5 years

Feeds - 2,014,000

Fuel 10 lit/day - 261,000

PHC Bill - 60,000

Salaries - 540,000

Machinery - 100,000

Depreciation on land asset at 10%

Initial Value 1,200,000

Salvage Value = 0.1x1,200,000

120,000

D = P – S

N = 1,200,000 – 120,000

5

= 216,000

Year

Annual Depreciation

Remaining Value

1

216,000

984,000


2

216,000

764,000


3

216,000

552,000


4

216,000

336,000


5

216,000

120,000

Depreciation of pond at 10%

Initial amount = 900,000

Salvage Value = 0.1x 900,000

D = P-S = 90,000 – 90,000

5

N = 162,000


Year

Annual Depreciation

Remaining Value


1

162,000

738,000


2

162,000

576,000


3

162,000

414,000


4

162,000

252,000


5

162,000

90,000

Depreciation of well at 5%

Initial Amount = N450,000

Salvage Value = 0.05 x 450,000

= 22,500

D = 450,000 - 22,500

5 = N85,500

Year

Annual Depreciation

Remaining Value


1

85,500

364,500


2

85,500

279,000


3

85,500

193,500


4

85,500

108,000


5

85,500

22,500


DEPRECIATION OF OFFICE (FARM HOUSE) 
Initial Value = N300,000

Salvage Value = 0.1 x 300,000

D = 300,000 – 30,000

5

=54,000

Year

Annual Depreciation

Remaining Value


1

54,000

246,000


2

54,000

192,000


3

54,000

138,000


4

54,000

84,000


5

54,000

30,000


CASH FLOW ANALYSIS


Year

1

2

3

4

5


Sales

4,352,000

3,352,000

3,352,000

3,352,000

3,352,000


Land

216,000

216,000

216,000

216,000

216,000


Pond

162,000

162,000

162,000

162,000

162,000


Well

85,500

85,500

85,500

85,500

85,500


Farm House

54,000

54,000

54,000

54,000

54,000

Over head Tank Pump

28,800

28,800

28,800

28,800

28,800

Generator

18,000

18,000

18,000

18,000

18,000

Deep freezer

64,000

64,000

64,000

64,000

64,000

Finger lings

240,000

240,000

240,000

240,000

240,000

Feeds

2,014,000

2,014,000

2,014,000

2,014,000

2,014,000

Fuel

261,000

261,000

261,000

261,000

261,000

PHC Bill

60,000

60,000

60,000

60,000

60,000


Salary

540,000

540,000

540,000

540,000

540,000

Miscel.

80,000

80,000

80,000

80,000

80,000

Gross profit

789,700

789,700

789,700

789,700

789,700

Net profit

750,215

750,215

750,215

750,215

750,215

EVALUATION OF THE PROJECT

There are various methods that can be used but the most appropriate for this project are the pay back period, Net present value and the Benefit cost ratio methods.

1. Payback Period

The project has an even cash flow of 4,352,000 each year for the 5 years period, on an investment amount of 5,000,000.

Payback period = Initial fixed investment

Annual cash flows

= 3,716,000

2,352,000

= 1.57

Payback period is the period of time taken before the capital in a project; the working capital is fully recovered.

In this study, the estimated payback period is approximately 1 ½ year. In view of the time of the project and amount involved the payback period is considered attractive and acceptable.

1. Net Present Value: Net present value is the classic economic method for evaluation and investment proposal like this.

NPV= n{ At ----C

t =0 (1+r)t

Where r = interest

C = present value of cash flow

Or initial capital investment

At = Cash inflow at time t

t = time in year

Net present Value = £ Discount factor 1 present Value –C

(1+r)n

Year cash flow discount factor present value

0 1 2,352,000 0.909 2,116,800

2 235,200 0.826 1,942,752

3 235200 0.751 1766352

4 235200 0.68 1599360

5 235200 0.62 1456240

8897731

NPV = 8,897,731-3,716,000

5,181,731

The Net present value is positive, so the project is acceptable. It means the rate of turn over exceed that minimum required rate of return

Benefit cost Ration

Cash inflow for 5 years = 4,352,000 x 5

= 21,760,000 (Benefit)

Cost = fixed cost + variable cost

= 26,112,000

B/c >I. So the project is acceptable.

RECOMMENDATIONS

The project based on the above evaluation method is economically viable and technically feasible. I hereby recommend strongly the implementation of this proposed project.

REFERENCES

1 Haruna A.B (2003) Aquaculture in the Tropics Theory and practice, pp 248-251.

2 Tiamiyu L.O (2002) Fisheries Economics Lecture Note, University of Agriculture Makurde

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FEASIBILITY STUDY PRESENTED TO THE FEDERAL REPUBLIC OF NIGERIA  | Farm Energy

FEASIBILITY STUDY PRESENTED TO THE FEDERAL REPUBLIC OF NIGERIA  | Farm Energy - feasibility study of laundry shop, feasibility study of duck egg production, feasibility study of a restaurant, feasibility study of car wash business,feasibility study of water refilling station,feasibility study of the project,free sample of feasibility study of bakeshop, feasibility study of computer shop.

Introduction

The shift in peoples dietary intake of meat especially red meat to fish due to increasing awareness of its low cholesterol level and the unsaturated fatty acid composition coupled with the ever increasing population has led to the increase demand for fish. 

This demand inspite of the combined efforts from both industrial trawling vessels and the artisan fisheries, the demand cannot be met with the supply from these sources; this is as a result of depleting stock in the natural water bodies due to over fishing and the devastating effects of pollution in our water bodies
FEASIBILITY STUDY PRESENTED TO THE FEDERAL REPUBLIC OF NIGERIA  | Farm Energy

The available alternatives to argument this short fall in supply are aquaculture and import. The Later should be discouraged because for a country that is trying to improve on its foreign reserve like ours to make such an attempt is unwise and uneconomical. We are now left with the only option which is aquaculture.

Feasibility takes into consideration the practicability of a project while viability dwells on, will the benefit of the project justify the cost? The benefit of the project as shown below in this proposal justifies the cost. The location is just out sketch of Minna town Korokpon to be précised with a distance of less than Five (5) Kilometers to the ADP fish hatchery where fingerlings could be source easily.
It proximity to the high way is also a good advantage as travelers who are interested will stop over to make some purchases because a conspicuous sign post that will be placed by the roadside. There is high probability of increasing demand in the future.

PROJECT LOCATION

The fish farm is to be located on a village land, located along Minna Suleja Road, Korokpon Village after chanchaga Minna Niger State. Factors considered

IN THE PROPOSED LOCATION

(Feasibility and viability)

The Chanchaga water works drainage is an added advantage for the healthy Aquaculture; this will also ensure all season farming.

· Topography: The slope of the land is the type that permits easy drainage of water in and out of the pond especially from the Chanchaga Water works drainage aside the well that sank to ensure higher production and expansion of fish farm in the future.

· Water: The physical-chemical and biological analysis of the well water and the Chanchaga drainage located near the site support fish culture

· Accessibility: The location is easily accessible close to the main express way of Minna Suleja Road just after Chanchaga make transfer of raw materials easier proximity to hotels and university domiciled within the capital city of Minna is a good advantage for easy marketing.

· Marketing: There is high demand for fish, especially mudfish by the inhabitants of the area, University Community, hotels, restaurants and fish barbecue centers across the Minna metropolis and beyond.

OBJECTIVE OF THE PROJECT PROPOSAL

· A technical guids to investment in fish farm project

· This will serve as a technical guide in the proposed farm

· The proposed fish farm is supposed to be stocked with 1,000 fingerlings two times in a year with available 3 concrete ponds measuring 5mx2mx1.5m.

Cat fish, Clarias gariepenus which is in high demand in the location the fish is to be cultured.

ASSUMPTIONS

· Mortality is put at 2% with the proper nutrition and management practice.

· The fish can be raised to table size two times in a year. Fish is supposed to gain an average weight of 1kg at the end of every six (6) months.

· A kilogram of fish will sell at the rate of N400 or N500

CAPITAL INVESTMENT

The total capital investment is about seven million (N7000,000) Infrastructures cost about N3,500000M while recurrent cost is about N2930,000 one million nine hundred and thirty thousand naira.

AMOUNT OF LOAN REQUIRED

Loan of about N5 Million at interest of 10% is require for the project while the remaining N2000,000 is the equity investment.

LOAN REPAYMENT PLAN

The even principal repayments with interest i.e the total loan sum divided by the number of years paid along with interest.


Year

Initial Balance

Interest Rate 10%

Principal Repayment

Total Repayment

15,000,000

500,000

1,000,000

1,500,000


2 350,000

350,000

1,000,000

1,350,000


3

2,500,000

250,000

1,000,000

1,250,000


4

1,500,000

150,000

1,000,000

1,150,000


5

500,000

50,000

1,000,000

1,060,000




MANAGEMENT

The farm staff strength is going to comprise of a farm manager who should be a graduate of fisheries with a minimum of 1 year farm experience. He/she is to be paid a salary of N360,000 per annum. The Manager is to be assisted by a farm attendant who must posses a Diploma and the farm Security both to be paid a salary of N180,000 per annum each depreciation of two deep freezer at 20% initial value N400,000 salvage value 0.2x400,000

D 400,000 – 80,000 = N80,000

5 = N64,000


Year

Annual Depreciation

Remaining Value


1

64,000

336,000


2

64,000

272,000


3

64,000

208,000


4

64,000

144,000


5

64,000

80,000


Depreciation on over head tank and pumping machine at 10%

Initial Value = N160,000

Salvage = N160,000

= N16,000

Depreciation = 160,000 – 160,000

5

= 28,800


Year

Annual Depreciation

Remaining Value


1

28,800

131,200


2

28,800

120,400


3

28,800

73,600


4

28,800

44,800


5

28,800

16,000

Depreciation on Generator at 10%

Initial Value = 100,000

Salvage = 0.1x100,000

= 10,000

Depreciation = 100,000 – 10,000

5

18,000


Year

Annual Depreciation

Remaining Value


1

18,000

82,000


2

18,000

64,000


3

18,000

46,000


4

18,000

28,000


5

18,000

10,000


Fixed Cost - 540,000

Land - 1,200,000

Pond - 900,000

Well - 300,000

Office/Farm - 400,000

Deep Freezer - 400,000

Generator - 100,000

Overhead tank and pump - 160,000

Recurrent cost - 2,700,000

Fingerlings - 240,000 per year

- 1,200,000 for 5 years

Feeds - 2,014,000

Fuel 10 lit/day - 261,000

PHC Bill - 60,000

Salaries - 540,000

Machinery - 100,000

Depreciation on land asset at 10%

Initial Value 1,200,000

Salvage Value = 0.1x1,200,000

120,000

D = P – S

N = 1,200,000 – 120,000

5

= 216,000

Year

Annual Depreciation

Remaining Value

1

216,000

984,000


2

216,000

764,000


3

216,000

552,000


4

216,000

336,000


5

216,000

120,000

Depreciation of pond at 10%

Initial amount = 900,000

Salvage Value = 0.1x 900,000

D = P-S = 90,000 – 90,000

5

N = 162,000


Year

Annual Depreciation

Remaining Value


1

162,000

738,000


2

162,000

576,000


3

162,000

414,000


4

162,000

252,000


5

162,000

90,000

Depreciation of well at 5%

Initial Amount = N450,000

Salvage Value = 0.05 x 450,000

= 22,500

D = 450,000 - 22,500

5 = N85,500

Year

Annual Depreciation

Remaining Value


1

85,500

364,500


2

85,500

279,000


3

85,500

193,500


4

85,500

108,000


5

85,500

22,500


DEPRECIATION OF OFFICE (FARM HOUSE) 
Initial Value = N300,000

Salvage Value = 0.1 x 300,000

D = 300,000 – 30,000

5

=54,000

Year

Annual Depreciation

Remaining Value


1

54,000

246,000


2

54,000

192,000


3

54,000

138,000


4

54,000

84,000


5

54,000

30,000


CASH FLOW ANALYSIS


Year

1

2

3

4

5


Sales

4,352,000

3,352,000

3,352,000

3,352,000

3,352,000


Land

216,000

216,000

216,000

216,000

216,000


Pond

162,000

162,000

162,000

162,000

162,000


Well

85,500

85,500

85,500

85,500

85,500


Farm House

54,000

54,000

54,000

54,000

54,000

Over head Tank Pump

28,800

28,800

28,800

28,800

28,800

Generator

18,000

18,000

18,000

18,000

18,000

Deep freezer

64,000

64,000

64,000

64,000

64,000

Finger lings

240,000

240,000

240,000

240,000

240,000

Feeds

2,014,000

2,014,000

2,014,000

2,014,000

2,014,000

Fuel

261,000

261,000

261,000

261,000

261,000

PHC Bill

60,000

60,000

60,000

60,000

60,000


Salary

540,000

540,000

540,000

540,000

540,000

Miscel.

80,000

80,000

80,000

80,000

80,000

Gross profit

789,700

789,700

789,700

789,700

789,700

Net profit

750,215

750,215

750,215

750,215

750,215

EVALUATION OF THE PROJECT

There are various methods that can be used but the most appropriate for this project are the pay back period, Net present value and the Benefit cost ratio methods.

1. Payback Period

The project has an even cash flow of 4,352,000 each year for the 5 years period, on an investment amount of 5,000,000.

Payback period = Initial fixed investment

Annual cash flows

= 3,716,000

2,352,000

= 1.57

Payback period is the period of time taken before the capital in a project; the working capital is fully recovered.

In this study, the estimated payback period is approximately 1 ½ year. In view of the time of the project and amount involved the payback period is considered attractive and acceptable.

1. Net Present Value: Net present value is the classic economic method for evaluation and investment proposal like this.

NPV= n{ At ----C

t =0 (1+r)t

Where r = interest

C = present value of cash flow

Or initial capital investment

At = Cash inflow at time t

t = time in year

Net present Value = £ Discount factor 1 present Value –C

(1+r)n

Year cash flow discount factor present value

0 1 2,352,000 0.909 2,116,800

2 235,200 0.826 1,942,752

3 235200 0.751 1766352

4 235200 0.68 1599360

5 235200 0.62 1456240

8897731

NPV = 8,897,731-3,716,000

5,181,731

The Net present value is positive, so the project is acceptable. It means the rate of turn over exceed that minimum required rate of return

Benefit cost Ration

Cash inflow for 5 years = 4,352,000 x 5

= 21,760,000 (Benefit)

Cost = fixed cost + variable cost

= 26,112,000

B/c >I. So the project is acceptable.

RECOMMENDATIONS

The project based on the above evaluation method is economically viable and technically feasible. I hereby recommend strongly the implementation of this proposed project.

REFERENCES

1 Haruna A.B (2003) Aquaculture in the Tropics Theory and practice, pp 248-251.

2 Tiamiyu L.O (2002) Fisheries Economics Lecture Note, University of Agriculture Makurde

RELATED SEARCH

Above all,, we believe this article,(Top Five Drinks That Help You Lose Weight) was interesting,if yes, don.t hesitate using our share button below to inform - friends and relations via Facebook twitter or google plus

FEASIBILITY STUDY PRESENTED TO THE FEDERAL REPUBLIC OF NIGERIA  | Farm Energy

FEASIBILITY STUDY PRESENTED TO THE FEDERAL REPUBLIC OF NIGERIA  | Farm Energy - feasibility study of laundry shop, feasibility study of duck egg production, feasibility study of a restaurant, feasibility study of car wash business,feasibility study of water refilling station,feasibility study of the project,free sample of feasibility study of bakeshop, feasibility study of computer shop.

Introduction

The shift in peoples dietary intake of meat especially red meat to fish due to increasing awareness of its low cholesterol level and the unsaturated fatty acid composition coupled with the ever increasing population has led to the increase demand for fish. 

This demand inspite of the combined efforts from both industrial trawling vessels and the artisan fisheries, the demand cannot be met with the supply from these sources; this is as a result of depleting stock in the natural water bodies due to over fishing and the devastating effects of pollution in our water bodies
FEASIBILITY STUDY PRESENTED TO THE FEDERAL REPUBLIC OF NIGERIA  | Farm Energy

The available alternatives to argument this short fall in supply are aquaculture and import. The Later should be discouraged because for a country that is trying to improve on its foreign reserve like ours to make such an attempt is unwise and uneconomical. We are now left with the only option which is aquaculture.

Feasibility takes into consideration the practicability of a project while viability dwells on, will the benefit of the project justify the cost? The benefit of the project as shown below in this proposal justifies the cost. The location is just out sketch of Minna town Korokpon to be précised with a distance of less than Five (5) Kilometers to the ADP fish hatchery where fingerlings could be source easily.
It proximity to the high way is also a good advantage as travelers who are interested will stop over to make some purchases because a conspicuous sign post that will be placed by the roadside. There is high probability of increasing demand in the future.

PROJECT LOCATION

The fish farm is to be located on a village land, located along Minna Suleja Road, Korokpon Village after chanchaga Minna Niger State. Factors considered

IN THE PROPOSED LOCATION

(Feasibility and viability)

The Chanchaga water works drainage is an added advantage for the healthy Aquaculture; this will also ensure all season farming.

· Topography: The slope of the land is the type that permits easy drainage of water in and out of the pond especially from the Chanchaga Water works drainage aside the well that sank to ensure higher production and expansion of fish farm in the future.

· Water: The physical-chemical and biological analysis of the well water and the Chanchaga drainage located near the site support fish culture

· Accessibility: The location is easily accessible close to the main express way of Minna Suleja Road just after Chanchaga make transfer of raw materials easier proximity to hotels and university domiciled within the capital city of Minna is a good advantage for easy marketing.

· Marketing: There is high demand for fish, especially mudfish by the inhabitants of the area, University Community, hotels, restaurants and fish barbecue centers across the Minna metropolis and beyond.

OBJECTIVE OF THE PROJECT PROPOSAL

· A technical guids to investment in fish farm project

· This will serve as a technical guide in the proposed farm

· The proposed fish farm is supposed to be stocked with 1,000 fingerlings two times in a year with available 3 concrete ponds measuring 5mx2mx1.5m.

Cat fish, Clarias gariepenus which is in high demand in the location the fish is to be cultured.

ASSUMPTIONS

· Mortality is put at 2% with the proper nutrition and management practice.

· The fish can be raised to table size two times in a year. Fish is supposed to gain an average weight of 1kg at the end of every six (6) months.

· A kilogram of fish will sell at the rate of N400 or N500

CAPITAL INVESTMENT

The total capital investment is about seven million (N7000,000) Infrastructures cost about N3,500000M while recurrent cost is about N2930,000 one million nine hundred and thirty thousand naira.

AMOUNT OF LOAN REQUIRED

Loan of about N5 Million at interest of 10% is require for the project while the remaining N2000,000 is the equity investment.

LOAN REPAYMENT PLAN

The even principal repayments with interest i.e the total loan sum divided by the number of years paid along with interest.


Year

Initial Balance

Interest Rate 10%

Principal Repayment

Total Repayment

15,000,000

500,000

1,000,000

1,500,000


2 350,000

350,000

1,000,000

1,350,000


3

2,500,000

250,000

1,000,000

1,250,000


4

1,500,000

150,000

1,000,000

1,150,000


5

500,000

50,000

1,000,000

1,060,000




MANAGEMENT

The farm staff strength is going to comprise of a farm manager who should be a graduate of fisheries with a minimum of 1 year farm experience. He/she is to be paid a salary of N360,000 per annum. The Manager is to be assisted by a farm attendant who must posses a Diploma and the farm Security both to be paid a salary of N180,000 per annum each depreciation of two deep freezer at 20% initial value N400,000 salvage value 0.2x400,000

D 400,000 – 80,000 = N80,000

5 = N64,000


Year

Annual Depreciation

Remaining Value


1

64,000

336,000


2

64,000

272,000


3

64,000

208,000


4

64,000

144,000


5

64,000

80,000


Depreciation on over head tank and pumping machine at 10%

Initial Value = N160,000

Salvage = N160,000

= N16,000

Depreciation = 160,000 – 160,000

5

= 28,800


Year

Annual Depreciation

Remaining Value


1

28,800

131,200


2

28,800

120,400


3

28,800

73,600


4

28,800

44,800


5

28,800

16,000

Depreciation on Generator at 10%

Initial Value = 100,000

Salvage = 0.1x100,000

= 10,000

Depreciation = 100,000 – 10,000

5

18,000


Year

Annual Depreciation

Remaining Value


1

18,000

82,000


2

18,000

64,000


3

18,000

46,000


4

18,000

28,000


5

18,000

10,000


Fixed Cost - 540,000

Land - 1,200,000

Pond - 900,000

Well - 300,000

Office/Farm - 400,000

Deep Freezer - 400,000

Generator - 100,000

Overhead tank and pump - 160,000

Recurrent cost - 2,700,000

Fingerlings - 240,000 per year

- 1,200,000 for 5 years

Feeds - 2,014,000

Fuel 10 lit/day - 261,000

PHC Bill - 60,000

Salaries - 540,000

Machinery - 100,000

Depreciation on land asset at 10%

Initial Value 1,200,000

Salvage Value = 0.1x1,200,000

120,000

D = P – S

N = 1,200,000 – 120,000

5

= 216,000

Year

Annual Depreciation

Remaining Value

1

216,000

984,000


2

216,000

764,000


3

216,000

552,000


4

216,000

336,000


5

216,000

120,000

Depreciation of pond at 10%

Initial amount = 900,000

Salvage Value = 0.1x 900,000

D = P-S = 90,000 – 90,000

5

N = 162,000


Year

Annual Depreciation

Remaining Value


1

162,000

738,000


2

162,000

576,000


3

162,000

414,000


4

162,000

252,000


5

162,000

90,000

Depreciation of well at 5%

Initial Amount = N450,000

Salvage Value = 0.05 x 450,000

= 22,500

D = 450,000 - 22,500

5 = N85,500

Year

Annual Depreciation

Remaining Value


1

85,500

364,500


2

85,500

279,000


3

85,500

193,500


4

85,500

108,000


5

85,500

22,500


DEPRECIATION OF OFFICE (FARM HOUSE) 
Initial Value = N300,000

Salvage Value = 0.1 x 300,000

D = 300,000 – 30,000

5

=54,000

Year

Annual Depreciation

Remaining Value


1

54,000

246,000


2

54,000

192,000


3

54,000

138,000


4

54,000

84,000


5

54,000

30,000


CASH FLOW ANALYSIS


Year

1

2

3

4

5


Sales

4,352,000

3,352,000

3,352,000

3,352,000

3,352,000


Land

216,000

216,000

216,000

216,000

216,000


Pond

162,000

162,000

162,000

162,000

162,000


Well

85,500

85,500

85,500

85,500

85,500


Farm House

54,000

54,000

54,000

54,000

54,000

Over head Tank Pump

28,800

28,800

28,800

28,800

28,800

Generator

18,000

18,000

18,000

18,000

18,000

Deep freezer

64,000

64,000

64,000

64,000

64,000

Finger lings

240,000

240,000

240,000

240,000

240,000

Feeds

2,014,000

2,014,000

2,014,000

2,014,000

2,014,000

Fuel

261,000

261,000

261,000

261,000

261,000

PHC Bill

60,000

60,000

60,000

60,000

60,000


Salary

540,000

540,000

540,000

540,000

540,000

Miscel.

80,000

80,000

80,000

80,000

80,000

Gross profit

789,700

789,700

789,700

789,700

789,700

Net profit

750,215

750,215

750,215

750,215

750,215

EVALUATION OF THE PROJECT

There are various methods that can be used but the most appropriate for this project are the pay back period, Net present value and the Benefit cost ratio methods.

1. Payback Period

The project has an even cash flow of 4,352,000 each year for the 5 years period, on an investment amount of 5,000,000.

Payback period = Initial fixed investment

Annual cash flows

= 3,716,000

2,352,000

= 1.57

Payback period is the period of time taken before the capital in a project; the working capital is fully recovered.

In this study, the estimated payback period is approximately 1 ½ year. In view of the time of the project and amount involved the payback period is considered attractive and acceptable.

1. Net Present Value: Net present value is the classic economic method for evaluation and investment proposal like this.

NPV= n{ At ----C

t =0 (1+r)t

Where r = interest

C = present value of cash flow

Or initial capital investment

At = Cash inflow at time t

t = time in year

Net present Value = £ Discount factor 1 present Value –C

(1+r)n

Year cash flow discount factor present value

0 1 2,352,000 0.909 2,116,800

2 235,200 0.826 1,942,752

3 235200 0.751 1766352

4 235200 0.68 1599360

5 235200 0.62 1456240

8897731

NPV = 8,897,731-3,716,000

5,181,731

The Net present value is positive, so the project is acceptable. It means the rate of turn over exceed that minimum required rate of return

Benefit cost Ration

Cash inflow for 5 years = 4,352,000 x 5

= 21,760,000 (Benefit)

Cost = fixed cost + variable cost

= 26,112,000

B/c >I. So the project is acceptable.

RECOMMENDATIONS

The project based on the above evaluation method is economically viable and technically feasible. I hereby recommend strongly the implementation of this proposed project.

REFERENCES

1 Haruna A.B (2003) Aquaculture in the Tropics Theory and practice, pp 248-251.

2 Tiamiyu L.O (2002) Fisheries Economics Lecture Note, University of Agriculture Makurde

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