A fishing project owned by Sanga family has its investment costs spread over from year 0 -3 as follows;

Tsh. 5 million, Tshs. 2 million, Tshs. 1.5 million and Tshs. 1.0 million respectively. Sanga family expects
to start fishing in year 4 to year 12 where the expected output are 1.5 tons in year 4 and production will
increase steadily annually at 5%.The annual operating costs starting from year4 are Tshs 880,000 and
will increase at 10% annually. It is estimated that, the unit price of fish per kilo will be Tsh. 2,000 and it
will be increasing at a rate of 5% annuallywhile the price of other fish products will be Tshs.800 per
kilogram and willremain constant for the entire life of a project.
Tasks:
(a)Draw up the cash flow for Sanga Family Fishing Project

To draw up the cash flow for the Sanga Family Fishing Project, we need to calculate the investment costs, operating costs, and revenue for each year.

Here is the breakdown:

Year 0: Investment cost = Tsh. 5 million
Year 1: Investment cost = Tsh. 2 million
Year 2: Investment cost = Tsh. 1.5 million
Year 3: Investment cost = Tsh. 1.0 million

Year 4: Operating cost = Tshs 880,000, Revenue = (1.5 tons * Tsh. 2,000/kg) = Tsh. 3 million
Year 5: Operating cost = (Tshs 880,000 * 1.1) = Tshs 968,000, Revenue = (previous year revenue * 1.05) = Tsh. 3.15 million
Year 6: Operating cost = (Tshs 968,000 * 1.1) = Tshs 1,064,800, Revenue = (previous year revenue * 1.05) = Tsh. 3.3075 million
Year 7: Operating cost = (Tshs 1,064,800 * 1.1) = Tshs 1,171,280, Revenue = (previous year revenue * 1.05) = Tsh. 3.47388 million
Year 8: Operating cost = (Tshs 1,171,280 * 1.1) = Tshs 1,288,408, Revenue = (previous year revenue * 1.05) = Tsh. 3.64758 million
Year 9: Operating cost = (Tshs 1,288,408 * 1.1) = Tshs 1,417,249.6, Revenue = (previous year revenue * 1.05) = Tsh. 3.82996 million
Year 10: Operating cost = (Tshs 1,417,249.6 * 1.1) = Tshs 1,558,974.56, Revenue = (previous year revenue * 1.05) = Tsh. 4.02145 million
Year 11: Operating cost = (Tshs 1,558,974.56 * 1.1) = Tshs 1,714,872.016, Revenue = (previous year revenue * 1.05) = Tsh. 4.22253 million
Year 12: Operating cost = (Tshs 1,714,872.016 * 1.1) = Tshs 1,886,359.2176, Revenue = (previous year revenue * 1.05) = Tsh. 4.43366 million

Now let's put this information into a table format:

| Year | Investment Cost | Operating Cost | Revenue |
|------|----------------|----------------|---------|
| 0 | Tsh. 5 million | - | - |
| 1 | Tsh. 2 million | - | - |
| 2 | Tsh. 1.5 million | - | - |
| 3 | Tsh. 1.0 million | - | - |
| 4 | - | Tshs 880,000* | Tsh. 3 million |
| 5 | - | Tshs 968,000* | Tsh. 3.15 million |
| 6 | - | Tshs 1,064,800* | Tsh. 3.3075 million |
| 7 | - | Tshs 1,171,280* | Tsh. 3.47388 million |
| 8 | - | Tshs 1,288,408* | Tsh. 3.64758 million |
| 9 | - | Tshs 1,417,249.6* | Tsh. 3.82996 million |
| 10 | - | Tshs 1,558,974.56* | Tsh. 4.02145 million |
| 11 | - | Tshs 1,714,872.016* | Tsh. 4.22253 million |
| 12 | - | Tshs 1,886,359.2176* | Tsh. 4.43366 million |

Note: "*" denotes the operating cost and revenue for the respective years.