High School Project

7/30/2019 High School Project

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Investment Office ANRS

Project Profile on the Establishmentof High School

Development Studies


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Development Studies

Table of Contents

1.Executive Summary...................................................................................3

2.Service Description and Application........................................................3

3.Market Study, School Capacity and Service Delivery Program............4

3.1Market Study...............................................................................................................4

3.1.1Present Demand and Supply................................................................................43.1.2Projected Demand..............................................................................................61

3.2School Capacity........................................................................................................66

3.3Service Program........................................................................................................664.Equipments and Utilities.........................................................................66

4.1Availability and Source of furniture and Equipment................................................66

4.2Annual Requirement and Cost of furniture and Equipment.....................................66

5.Location and Site......................................................................................67

6.Service Delivery Process and Engineering ............................................67

6.1Service Delivery Process..........................................................................................67

6.2School Furniture and Equipment..............................................................................68

6.3Civil Engineering Cost..............................................................................................68


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1. Executive Summary

This profile envisages the establishment of high school (s) in Amhara Region to enroll

550 students.

The present demand for standard high schools in urban centers of the Region, mainly in

zonal towns, is very crucial.

The total investment requirement is estimated at Birr 2.1 million out of which 56.2% is

for furniture and equipment.

The plant will create employment opportunities for 19 persons.

The project is financially viable with an internal rate of return (IRR) of 17.9% and a net

present value (NPV) of Birr 1.0 million discounted at 18%.

2. Service Description and ApplicationThese are high schools from 9th to 10th grades and college preparatory classes which

pro ide high standard and rigoro s teaching and learning for st dents ho can afford to


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and the rest will use the services of state or public institutions. This is what is happening

mainly in Addis Ababa to day in the areas of health and education.

Education is key to change and progress, therefore, the Government of

Ethiopia has adopted a new Education Sector Development Policy and

Program in 1994 to make this sector as one of the pillars for poverty

reduction and benefit of the masses. In line with the Government

Policy and Program, the Amhara Reginal Government has developed its

own Policy and Program.

3. Market Study, School Capacity and Service Delivery

Program

3.1 Market Study

3.1.1 Present Demand and Supply

The general education supply and standards of the Amhara Region in relation to the

country is presented bellow.

Table 1 indicates that the ratio of total school age population to total population is about


5/84

secondary (12.0%) education which is last third in both cases from Somali and Afar

Regions.

The present low enrollment rate of the region is directly related to the supply sides of

educational inputs. The existing 25,657 sections which are supposed to serve 1,282,850

school age children are obliged to enroll 655,198 extra students.

The very high gross enrollment ratio exhibited in Gambella and Benshangul Gumuz

seems that students enrolled are above the school age population.

The number of Existing Primary and Secondary Schools and Students Enrolled by

Regions in 1994 E.C is indicated bellow in table 2. There were a total of 12,087 Primary

(of which 619 are non-government) and 435 Secondary (of which 54 are Non-

government) Schools in the country during 1994 E.C. with a total of 117,308 class rooms

of which 108,888 are Primary serving 7,982,760 students and 8,420 Secondary sections

serving 684,630 students.

Table -1-

Population, school Age Population and Enrollment Ratio By Region (1994 E.C.)

Population in 000No


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Genderparity

IndexP

upil

teacher

RatioPu

pil

Section

RatioSo

urce:DSA,

ANRS'

potential

Assessme

nt

Survey,

Educatio

n Sector

final

Report,

2006.Unit199

6/97199

7/98199

8/99199

9/002000/01200

1/02200

2/03200

11 D.DawaPri

mary

(7-14)

61Secondary

(15-16)

4Primary(1-8)

37996Secondary46.9%

2 shifts

(9-10)


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Rate620

9361.37

5.112089455798

2760684

6301088

8884207

3.381.3S

ource:

Educati

onStatistic

s

Annual

Abstrac

t, 1994

E.C

(2001/0

2)82.5S

econdar

y1Tigra

y3,7977

8117272

2809023

77.638.3

2Afar1,2432455

9345569

512.64.2


8/84

Gumuz

5511152

55977% of

Qualifie

d

Teacher

s

Gross

Enrollm

entRatio

*About

83% of

the

populati

on age

15 to 16

are out

of the

educati

on

system.


9/84

l State

27

Woreda

s do not

have

seconda

ry

schools.

In the

period

1996/97

-

2000/01,

the

average

annual

student

number

growth

was


10/84

growth

was

only

1.6%.

The

average

annual

growth

rate for

gross

enrollm

ent

ratio

was

10.1%

(male

10.0

and

female

9 9)


11/84

informa

tion

indicate

s that to

meet

the goal

of

increasi

ng

access

to

educati

on the

ANRS

has

planned

to

constru

ct 481

lower


12/84

overcro

wded

schools,

maintai

n and

expand

other

facilities

. The

task of

constru

ction

requires

technica

l skills,

capital

and

immens

e work,

which


13/84

Equity

Equityis

expecte

d to

address

the

questio

n of

gender

and

zonal

gaps.

In

2003/04

the

gross

particip

ation


14/84

seconda

ry

educati

on is

shown

in table

4.

The

disparit

y

among

the

zones

above

the

regional

average

reads

as;

Bahir


15/84

Shewa

(8.8%).

On the

other

end,

zones

below

the

regional

average

are;

Oromiy

a

(4.0%),

Wag

Himera

(4.1%),

West

Gojjam

(5 5%)


16/84

gender

parity

index is

highest

at

North

Gonder

zone

and

lowest

at

South

Wollo,

Oromiy

a and

North

Wollo

zones.


17/84

daryEduca

tionfor

2000/01 byZone

Zone

In the

Amhara

Region,

the

provisio

n of

social

services

by the

private

sector is

almost


18/84

in basic

educatio

n

program

s. In the

region

there are

16accredit

ed and

14 pre-

accredit

ed

private

colleges

located

in 8

towns.

Their

capacitie

s are

4 952


19/84

3,705

(74.82%

-

accredit

ed) and

2,289

(72.57%

- pre-accredit

ed)

designat

ed for

10+1

teacher

training

program

s and the

remaini

ng 1,247

(25.18%

accredit

d)


20/84

two

TTIs,

131

CSTCs

and 20

middle

level

TVETinstitutio

ns in the

region.

These

institutio

ns could

not meet

the

human

resource

demand

of the

region.


21/84

high

schools

are in

great

need by

many

parents

in themajor

urban

centers,

like

Bahir

Dar,

Gondar,

Dessie-

Combolc

ha,

Debre

Birhan

and

D b


22/84

The

quality,

access,

equity

and

efficienc

y of the

existingeducatio

nal

service

delivery

system

of the

country

are in

general

below

standard

. A brief

look of

d i


23/84

indicate

d below.

The new

Educatio

n Policy

of

Ethiopia(1994)

sets the

followin

g norm

for this

level of

educatio

n.

Second

ary

Educatio

n will be

of four


24/84

students

identify

their

interest

for

further

educatio

n, for

specific

training

and for

work.

General

educatio

n will be

complete

d at the

first

cycle

(grade

10). The

d


25/84

or areas

of

training

which

will

prepare

them

adequat

ely for

higher

educatio

n and

for

work)

The

compreh

ensive

secondar

y

educatio

( d


26/84

educatio

n, those

who

complete

the level

are

expected

to join

the

medium

&

interme

diate

technical

vocation

al skill

training

program

s which

provide

three

l l


27/84

e level 1,

certificat

e level 2

and

diploma

respectiv

ely.

Higher

secondar

y

educatio

n (grade

11 & 12)

designed

for 17 &

18 year

age

group.

If

successf

l h


28/84

ANRS.

Table3:

TrendsSecondary

Education inthe

AARS

Indicator

s

Fem

aleT

otal

Wes

t

Gojj

am6.3

4.75

.50.

752

865

042

49A

wi10.19

.19.

60.9

Male Female Total


29/84

80.7

406

835

293

5Or

omi

ya4.

93.0

4.00

.641

625

4100551095

(26.2

%)

Wat

er52.6%

Clini

c TVprog

ram

s----

10.9

11.4

13.7

117.

0

*Numbe

r of

Scho

l N


30/84

313,

865

Teac

herStud

ent

Rati

oNo

1:32

1:40

1:43

1:50

1:501:43

1:43

1:42

1:56

Secti

on

Stud

ent

RatioNo

1:62

1:70

1:71

1:77

1:79

1:77

1:66

1:58

1:73Text

book

Stud


31/84

on

Rate

%72

.5276:52

80.5

5Nu

mbe

r of

Stud

ents

No7

5,77887,

4329

8,42

8110

,970

120,

1071

19,6

97105,25

3131

,519

169,

993S

choo

l

Facil

ities

6986Regi

onSc

hool


32/84

imar

ySec

onda

ry1Tigra

y926

4158

8941

7228

0902

3903

65.3

80.02Afa

r142

7291

2434

5569

5324

1.91

08.0

3Amhara

2975

8519

4804

8119

9862

5657

1556

75.9

77.14Or

omia

4592


33/84

muz

2751

2102

00959771

7359

158.

865.

77S

NNP

R23

5284

17704191

1452

7222

2412

7179

.790.

18G

amb

ella1

4374

0497

2069

6543

661.

957.

49H

arra

ri48

42727164

0251

4805


34/84

5272

2224

67.1

13.28Ga

nbel

a217

4010

2069

6541

02.7

16.7

9Harrari

1662

6764

0251

4107

.559.

610

A.A

baba

2,57

0364

1321

2242

1611

5128

.469.

311

D.D

awa3305

4156

9866


35/84

Abst

ract,

1994

E.C(200

1/02)

Pri

mar

y

Shif

t

Syst

em

1

2,448

Lat

rine

1024

(24.5


36/84

l

sch

ools

,

3,06

0

are

loca

ted

in

Am

har

a

Reg

ion,

of

whi

ch

2,97

5


37/84

ools

,

res

pect

ivel

y.

The

Pri

mar

y

sch

ools

hav

e a

tota

l of

25,6

57

sect

ions


38/84

Sec

ond

ary

sch

ools

hav

e

1,55

6

Sect

ions

serv

ing

119,

986

stu

den

ts.

In


39/84

stu

den

t-

sect

ion

rati

o of

eac

h

Reg

ion.

In

this

res

pect

,

stu

dents

per


40/84

in

Am

har

a

Reg

ion

(75.

9)

nex

t to

SN

NP

R

(79.

72)

am

ong

populat

ed


41/84

Sec

ond

ary

Sch

ools

are

hig

her

in

So

mal

i

Reg

ion

(13

4.7)

Foll

owed

by


42/84


43/84


44/84


45/84

0.75

586

526

454

Reg

ion9

.17.

48.3

0.85

079

423

341

Sou

rce:

DSA

,

ANR

S'

pote

ntial

Asse


46/84

Sou

th

Wol

lo12

.28.

410.

30.6

538

043

164

2No

rth

Wol

lo7.

74.5

6.10

.660

793225

32


47/84

uth

Gon

dor

Mal

e

C.

Qu

alit

y

Qua

lity

in

edu

cati

on

is a

nec

essit

y


48/84

cont

ent,

lear

ning

envi

ron

men

t,

proc

esse

s,

mod

e of

asse

ssm

ent

plus

internal

effi


49/84


50/84

ulati

on

in

the

peri

od

199

6/97

-

200

0/01

was

14.6

2%,

whil

e

that

ofteac

hers


51/84


52/84

per

sect

ion

&

per

teac

her

affe

ctin

g

qual

ity

neg

ativ

ely.

In

the

period

und


53/84

qual

ifie

d

teac

hers

was

41

%

mal

e &

33

%

fem

ale).

59

%

of

theteac

hing


54/84

ifie

d.

The

afor

eme

ntio

ned

pro

ble

ms

cou

pled

with

shor

tage

and

poo

rqual

ity


55/84


56/84

ng

othe

r

thin

gs

by

revi

ewi

ng

tren

ds

in

repe

titio

n

rate,

dro

poutrate,

pro


57/84

edu

cati

on

dev

elop

men

t

pro

gra

m

(ES

DP-

200

3-

200

5)

of

theAN

RS


58/84

sure

s of

inte

rnal

effi

cien

cy,

Exc

ept

for

grad

uati

on

rate.

Thu

s,

pro

motion

rate


59/84

m

72.5

2%

in

200

2/03

.

Rep

etiti

on

rate

and

dro

p

out

rate

shal

l bedecr

ease


60/84


61/84

edu

cati

on

perf

orm

anc

e of

the

Reg

ion

dem

and

s an

over

all

imp

rove

ment

with


62/84

Sust

aina

ble

dev

elop

men

t is

abo

ut

enh

anci

nghum


63/84

2 Afar 280 119 12600 5355

3 Amhara 4393 1703 197685 76635

4 Oromia 6113 2384 275085 107280

5 Somalia 896 403 40320 18135

6 Ben.Gumuz 140 58 6300 2610

7 SNNPR 3595 1316 161775 59220

8 Gambella 50 19 2250 855

9 Harrari 38 14 1710 630

10 Addis Ababa 411 183 18495 8235

11 Dire Dawa 82 29 3690 1305

Source: Population and Housing Census, Country level 1994 E.C.

In addition assessments of the state of education in the ANRS made by the DSA, has

revealed the following gaps existed in the areas of the educational delivery system in the

region.

Level of Literacy

The national literacy rate level is 29.2% and that of ANRS stands

at 23.1%. Gaps are 70.8% nation wide and 76.9% for ANRS.

Kindergarten Education

Regions coverage of KG education is only 1.4% with a very high

gap of 98.6%

Primary Education (both first and second cycles)

Participation rate in the region at this level is 64.2% with unmet


64/84

17 schools and 4 colleges are established to address the technical

and vocational needs in the area.

Non-Formal Education

Plays very important role in provision of basic education in the

inaccessible areas to increase participation rate at the primary

level.

Special Education

Meant to serve people with disabilities.

Construction

Can facilitate or constrain access in education depending in its

availability or shortage.

Textbook and Instructional Materials

They play important roles in availing quality education.

In general, therefore, in order to provide sufficient and quality education in the Region,

the participation and involvement of the community at large, NGOs, and private

investors in building schools, and providing schools with instructional materials,

equipment, furniture is vital.


65/84

The proposed school will cater to the needs of children of medium and

high income groups. Currently three categories of schools are beingrun in Ethiopia, catering to three main segments of the market, mainly

higher medium and low-income groups. The schools, which serve the

high and medium income groups, are run by the private sector. They

usually charge high fees per month per student and these schools

have large facilities, enjoy repute due to their modern system ofeducation by using scientific techniques and have qualified and

specialized faculty. Most private schools in Addis Ababa fall in the

medium category having fee range from Birr 200.00 to Birr 500.0 per

month per student. The third category (medium range) provides

facilities even less than the minimum required by the Ministry of

Education, i.e. less space per student (minimum required 12 sq. ft. per

student and high student teacher ratio.

Parents are curious about the future of their children so they think

extensively before admitting their children in any school. Following are

the main factors (not conclusive) on the basis of which parents make

choice of schools.


66/84

could be Birr 200.00 per month per student, which is Birr 2,000.00 per

annum excluding annual registration fee.

3.2 School Capacity

The capacity of the proposed high school is assumed to enroll about 550 students at full

capacity.

3.3 Service Program

Reasonable time is required to promote the importance of private school and thus attract

parents towards the school. Therefore, the proposed school is assumed to start operation

at 50% capacity in the first year, 65% in the second year 75% in the third year, 85% in

the fourth year and 100% thereafter.

4. Equipments and Utilities

4.1 Availability and Source of furniture and Equipment

All essential school furniture and equipments such as computers, desks, blackboards,

cupboards and chalk are available locally.

4 2 A l R i t d C t f f it d


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Books & Labs

(Instruments) 150,000

Furniture & Fixture 300,000Electrical & water 50,000Office Furniture 15,000

Total 794,000

5. Location and Site

Investment opportunity regarding setting up of high school can be

opened in big cities where relatively high and medium income groups

are settled, like Bahir Dar, Gondar, Dessie, Debre Markos, Debre

Berhan and Kombolcha.

6. Service Delivery Process and Engineering

6.1 Service Delivery Process

Education Service delivery is a noble and professional activity that

requires experiences and qualifications from different streams of

disciplines. At different levels of education, the teaching process is

carried out as per the curriculum, standards, rules and regulations set

by the Ministry of Education of the country Education service delivery


68/84

- gives tests and examinations as per schedules, corrects and

records on each student's card/ certificate and gives rank

and then pass over same to the school.

6.2 School Furniture and Equipment

Even though the minimum requirement of furniture and equipments of

a high school is primarily determined by the Ministry of Education,

private high schools are required to supply extra and timely teaching

materials so as to develop the all rounded development of enrolled

students.

6.3 Civil Engineering Cost

Private high schools do not have large student population. Average size of a private high

school is about 500 students. For a private high school of 550 students, about 9000m 2 of

land is required of which 800m2 could be for building class rooms, library, and laboratory

and office buildings. The total construction and civil engineering cost of the school

building is estimated to be Birr 1,200,000.00 at Birr 1500.00 per meter square. Land lease

for social services is assumed to be 25% of normal charge.

7. Human Resource and Training Requirement


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Librarian 1 750 9,000Secretary 1 800 9,600Guards 3 400 14,400Cleaner 2 350 8,400

Total 19 275,400

7.2 Training Requirement

All teachers should be trained in pedagogical science either in government or private

education institutions and be qualified in each subject given in high schools.

8. Financial Analysis

8.1 Underlying Assumption

The financial analysis of high school project is based on the data provided in the

preceding sections and the following assumptions.


70/84

A. Construction and Finance

Construction period 2 years

Source of finance 40% equity and 60% loan

Tax holidays 2 years

Bank interest rate 12%

Discount for cash flow 18%

Value of land Based on lease rate of ANRS

Spare Parts, Repair & Maintenance 3% of fixed investment

B. Depreciation

Building 5%

Machinery and equipment 10%

Office furniture 10%

Vehicles 20%

Pre-production (amortization) 20%

C. Working Capital (Minimum Days of Coverage)

Raw Material-Local 30 days

Raw Material-Foreign 120 daysFactory Supplies in Stock 30 days

S P t i St k d M i t 30 d


71/84

Total Initial Investment

Item CostLand 6,750.00

Building and civil works 1,200,000.00

Office equipment 15,000.00

Vehicles 0.00

Plant machinery & equipment 729,000.00

Total Fixed Investment 1,950,750.00Pre production capital expenditure 97,537.50

Total Initial Investment 2,048,287.50

Working capital at full capacity 86,473.45

Total 2,134,760.95

*Pre-production capital expenditure includes - all expenses for pre-investment studies,

consultancy fee during construction and expenses for companys establishment, projectadministration expenses, commission expenses, preproduction marketing and interest

expenses during construction.

8.3 Service Costs

The total service cost at full capacity operation is estimated at about Birr 883 thousands

(see Table 9). Wages and salaries account for 31.2%.

Table -9- Total Service Cost


72/84

8.4 Financial Evaluation

I. Profitability

According to the income statement of the project, the school project will generate profit

starting from the second year of operation.

II. Breakeven Analysis

The break even point of the project is estimated by using income statement projection.

The Project breaks-even breaks evens at 32.7% of capacity utilization.

III. Payback Period

The project will pay back fully the initial investment in the sixth year.

IV. Simple Rate of Return

The simple rate of return of the project at full capacity utilization is 20.5%.


73/84

earlier. It will Improve the standard of education to be given to students who can attend

these schools, produce students with strong academic background and with high potential

to go to higher education. In general the envisaged project promotes the socio-economic

goals and objectives stated in the strategic plan of the Amhara National Regional State.

These benefits are listed as follows :

A. Profit Generation

The project is found to be financially viable and earns on average a profit of Birr 0.30million per year and Birr 3.0 million within the project life. Such result induces the

project promoters to reinvest the profit which, therefore, increases the investment

magnitude in the region.

B. Tax Revenue

In the project life under consideration, the region will collect about Birr 1.2 million from

corporate tax payment alone (i.e. excluding income tax, sales tax and VAT). Such result

creates additional fund for the regional government that will be used in expanding social

and other basic services in the region.

C. Employment and Income Generation

The proposed project is expected to create employment opportunity for 19 professionals


74/84

ANNEXES


75/84

Annex 1: Total Net Working Capital Requirements (in Birr)

CONSTRUCTION PRODUCTION

Year 1 Year 2 1 2 3 4

Capacity Utilization (%) 0.00 0.00 75% 85% 100% 0%

1. Total Inventory 0.00 0.00 1430015.96 1620684.76 1906687.95 0.00

Raw Materials in Stock- Total 0.00 0.00 355090.91 402436.36 473454.55 0.00

Raw Material-Local 0.00 0.00 355090.91 402436.36 473454.55 0.00

Raw Material-Foreign 0.00 0.00 0.00 0.00 0.00 0.00

Factory Supplies in Stock 0.00 0.00 8618.68 9767.83 11491.57 0.00

Spare Parts in Stock and Maintenance 0.00 0.00 64814.73 73456.69 86419.64 0.00

Work in Progress 0.00 0.00 215466.91 244195.84 287289.22 0.00

Finished Products 0.00 0.00 430933.83 488391.67 574578.44 0.00

2. Accounts Receivable 0.00 0.00 1963636.36 2225454.55 2618181.82 0.00

3. Cash in Hand 0.00 0.00 227511.65 257846.54 303348.87 0.00

CURRENT ASSETS 0.00 0.00 3266073.07 3701549.48 4354764.10 0.00

4. Current Liabilities0.00 0.00 1963636.36 2225454.55 2618181.82 0.00

Accounts Payable 0.00 0.00 1963636.36 2225454.55 2618181.82 0.00

TOTAL NET WORKING CAPITAL REQUIRMENTS 0.00 0.00 1302436.71 1476094.94 1736582.28 0.00

INCREASE IN NET WORKING CAPITAL 0.00 0.00 1302436.71 173658.23 260487.34 -1736582.28

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Annex 1: Total Net Working Capital Requirements (in Birr) (continued)

PRODUCTION

5 6 7 8 9 10

Capacity Utilization (%) 100% 100% 100% 100% 100% 100%

1. Total Inventory 1906687.95 1906687.95 1906687.95 1906687.95 1906687.95 1906687.95

Raw Materials in Stock-Total 473454.55 473454.55 473454.55 473454.55 473454.55 473454.55

Raw Material-Local 473454.55 473454.55 473454.55 473454.55 473454.55 473454.55

Raw Material-Foreign 0.00 0.00 0.00 0.00 0.00 0.00

Factory Supplies in Stock 11491.57 11491.57 11491.57 11491.57 11491.57 11491.57

Spare Parts in Stock and Maintenance 86419.64 86419.64 86419.64 86419.64 86419.64 86419.64

Work in Progress 287289.22 287289.22 287289.22 287289.22 287289.22 287289.22

Finished Products 574578.44 574578.44 574578.44 574578.44 574578.44 574578.44

2. Accounts Receivable 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82

3. Cash in Hand 303348.87 303348.87 303348.87 303348.87 303348.87 303348.87

CURRENT ASSETS 4354764.10 4354764.10 4354764.10 4354764.10 4354764.10 4354764.10

4. Current Liabilities 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82

Accounts Payable 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82

TOTAL NET WORKING CAPITAL REQUIRMENTS 1736582.28 1736582.28 1736582.28 1736582.28 1736582.28 1736582.28

INCREASE IN NET WORKING CAPITAL 1736582.28 0.00 0.00 0.00 0.00 0.00

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Annex 2: Cash Flow Statement (in Birr)


Year 1 Year 2 1 2 3 4

TOTAL CASH INFLOW 13863150.00 15599732.28 19963636.36 20661818.18 24392727.27 -2618181.82

1. Inflow Funds 13863150.00 15599732.28 1963636.36 261818.18 392727.27 -2618181.82

Total Equity 5545260.00 6239892.91 0.00 0.00 0.00 0.00

Total Long Term Loan 8317890.00 9359839.37 0.00 0.00 0.00 0.00

Total Short Term Finances 0.00 0.00 1963636.36 261818.18 392727.27 -2618181.82

2. Inflow Operation 0.00 0.00 18000000.00 20400000.00 24000000.00 0.00

Sales Revenue 0.00 0.00 18000000.00 20400000.00 24000000.00 0.00

Interest on Securities 0.00 0.00 0.00 0.00 0.00 0.00

3. Other Income 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL CASH OUTFLOW 13863150.00 13863150.00 13727821.73 11926383.93 16505664.06 286902.48

4. Increase In Fixed Assets 13863150.00 13863150.00 0.00 0.00 0.00 0.00

Fixed Investments 13203000.00 13203000.00 0.00 0.00 0.00 0.00

Pre-production Expenditures 660150.00 660150.00 0.00 0.00 0.00 0.00

5. Increase in Current Assets 0.00 0.00 3266073.07 435476.41 653214.61 -4354764.10

6. Operating Costs 0.00 0.00 5700688.04 6423291.77 7507197.38 281160.00

7. Corporate Tax Paid 0.00 0.00 0.00 0.00 3631190.90 0.00

8. Interest Paid 0.00 0.00 4761060.63 2121327.52 1767772.94 1414218.35

9. Loan Repayments 0.00 0.00 0.00 2946288.23 2946288.23 2946288.23

10. Dividends Paid 0.00 0.00 0.00 0.00 0.00 0.00

Surplus(Deficit) 0.00 1736582.28 6235814.63 8735434.25 7887063.21 -2905084.30

Cumulative Cash Balance 0.00 1736582.28 7972396.91 16707831.15 24594894.36 21689810.06

Annex 2: Cash Flow Statement (in Birr): Continued

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PRODUCTION

5 6 7 8 9 10

TOTAL CASH INFLOW 26618181.82 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00

1. Inflow Funds 2618181.82 0.00 0.00 0.00 0.00 0.00

Total Equity 0.00 0.00 0.00 0.00 0.00 0.00

Total Long Term Loan 0.00 0.00 0.00 0.00 0.00 0.00

Total Short Term Finances 2618181.82 0.00 0.00 0.00 0.00 0.00


Sales Revenue 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00


3. Other Income 0.00 0.00 0.00 0.00 0.00 0.00


4. Increase In Fixed Assets 0.00 0.00 0.00 0.00 0.00 0.00Fixed Investments 0.00 0.00 0.00 0.00 0.00 0.00


5. Increase in Current Assets 4354764.10 0.00 0.00 0.00 0.00 0.00

6. Operating Costs 7507197.38 7507197.38 7507197.38 7507197.38 7507197.38 7507197.38


8. Interest Paid 1060663.76 707109.17 353554.59 0.00 0.00 0.00

9. Loan Repayments 2946288.23 2946288.23 2946288.23 0.00 0.00 0.00

10. Dividends Paid 0.00 0.00 0.00 0.00 0.00 0.00

Surplus(Deficit) 6905944.69 8795797.18 9043285.40 12237061.83 12237061.83 12237061.83

Cumulative Cash Balance 28595754.76 37391551.94 46434837.34 58671899.17 70908961.01 83146022.84

Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTEDCONSTRUCTION PRODUCTION

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Year 1 Year 2 1 2 3 4



Sales Revenue 0.00 0.00 18000000.00 20400000.00 24000000.00 0.00


2. Other Income 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL CASH OUTFLOW 13863150.00 13863150.00 7003124.74 6596950.00 11398875.63 -1455422.28

3. Increase in Fixed Assets 13863150.00 13863150.00 0.00 0.00 0.00 0.00



4. Increase in Net Working Capital 0.00 0.00 1302436.71 173658.23 260487.34 -1736582.28

5. Operating Costs 0.00 0.00 5700688.04 6423291.77 7507197.38 281160.00


NET CASH FLOW-

13863150.00

-

13863150.00 10996875.26 13803050.00 12601124.37 1455422.28

CUMMULATIVE NET CASH FLOW-

13863150.00

-

27726300.00

-

16729424.74 -2926374.74 9674749.63 11130171.91

Net Present Value (at 18%)-

13863150.00

-

11748432.20 7897784.59 8400962.37 6499519.77 636178.49

Cumulative Net present Value -13863150.00 -25611582.20 -17713797.62 -9312835.25 -2813315.49 -2177136.99

Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED (Continued)

PRODUCTION

5 6 7 8 9 10


5


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Sales Revenue 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00


2. Other Income 0.00 0.00 0.00 0.00 0.00 0.00


3. Increase in Fixed Assets 0.00 0.00 0.00 0.00 0.00 0.00



4. Increase in Net Working Capital 1736582.28 0.00 0.00 0.00 0.00 0.00

5. Operating Costs 7507197.38 7507197.38 7507197.38 7507197.38 7507197.38 7507197.386. Corporate Tax Paid 3843323.66 4043608.03 4149674.41 4255740.79 4255740.79 4255740.79

NET CASH FLOW 10912896.68 12449194.59 12343128.21 12237061.83 12237061.83 12237061.83

CUMMULATIVE NET CASH FLOW 22043068.59 34492263.18 46835391.39 59072453.22 71309515.06 83546576.89

Net Present Value (at 18%) 4042481.12 3908113.82 3283743.16 2758919.88 2338067.70 1981413.30

Cumulative Net present Value 1865344.12 5773457.95 9057201.11 11816120.99 14154188.69 16135601.99

Net Present Value (at 18%) 16,135,601.99

Internal Rate of Return 32.0%

Annex 4: NET INCOME STATEMENT ( in Birr)

PRODUCTION

1 2 3 4 5

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Capacity Utilization (%) 75% 85% 100% 0% 100%

1. Total Income 18000000.00 20400000.00 24000000.00 0.00 24000000.00

Sales Revenue 18000000.00 20400000.00 24000000.00 0.00 24000000.00

Other Income 0.00 0.00 0.00 0.00 0.00

2. Less Variable Cost 5029432.04 5700022.97 6705909.38 0.00 6705909.38

VARIABLE MARGIN 12970567.97 14699977.03 17294090.62 0.00 17294090.62

(In % of Total Income) 72.06 72.06 72.06 #DIV/0! 72.06

3. Less Fixed Costs 3292316.00 3344328.80 3422348.00 2902220.00 3422348.00

OPERATIONAL MARGIN 9678251.97 11355648.23 13871742.62 -2902220.00 13871742.62

(In % of Total Income) 54 56 58 #DIV/0! 58

4. Less Cost of Finance 4761060.63 2121327.52 1767772.94 1414218.35 1060663.76

5. GROSS PROFIT 4917191.34 9234320.70 12103969.68 -4316438.35 12811078.86

6. Income (Corporate) Tax 0.00 0.00 3631190.90 0.00 3843323.66

7. NET PROFIT 4917191.34 9234320.70 8472778.78 -4316438.35 8967755.20

RATIOS (%)

Gross Profit/Sales 27% 45% 50% #DIV/0! 53%

Net Profit After Tax/Sales 27% 45% 35% #DIV/0! 37%

Return on Investment 33% 39% 35% -10% 34%

Return on Equity 42% 78% 72% -37% 76%

Annex 4: NET INCOME STATEMENT (in Birr):Continued

PRODUCTION

6 7 8 9 10

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Capacity Utilization (%) 100% 100% 100% 100% 100%

1. Total Income 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00

Sales Revenue 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00

Other Income 0.00 0.00 0.00 0.00 0.00

2. Less Variable Cost 6705909.38 6705909.38 6705909.38 6705909.38 6705909.38

VARIABLE MARGIN 17294090.62 17294090.62 17294090.62 17294090.62 17294090.62

(In % of Total Income) 72 72 72 72 72

3. Less Fixed Costs 3108288.00 3108288.00 3108288.00 3108288.00 3108288.00

OPERATIONAL MARGIN 14185802.62 14185802.62 14185802.62 14185802.62 14185802.62

(In % of Total Income) 59 59 59 59 59

4. Less Cost of Finance 707109.17 353554.59 0.00 0.00 0.00

5. GROSS PROFIT 13478693.45 13832248.03 14185802.62 14185802.62 14185802.62

6. Income (Corporate) Tax 4043608.03 4149674.41 4255740.79 4255740.79 4255740.79

7. NET PROFIT 9435085.41 9682573.62 9930061.83 9930061.83 9930061.83

RATIOS (%)

Gross Profit/Sales 56% 58% 59% 59% 59%

Net Profit After Tax/Sales 39% 40% 41% 41% 41%

Return on Investment 34% 34% 34% 34% 34%

Return on Equity 80% 82% 84% 84% 84%

Annex 5: Projected Balance Sheet (in Birr)


Year 1 Year 2 1 2 3 4

TOTAL ASSETS 13863150.00 29462882.28 36343709.98 42893560.64 48812778.46 43248308.41

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1. Total Current Assets 0.00 1736582.28 11238469.98 20409380.64 28949658.46 21689810.06

Inventory on Materials and Supplies 0.00 0.00 428524.31 485660.89 571365.75 0.00

Work in Progress 0.00 0.00 215466.91 244195.84 287289.22 0.00

Finished Products in Stock 0.00 0.00 430933.83 488391.67 574578.44 0.00

Accounts Receivable 0.00 0.00 1963636.36 2225454.55 2618181.82 0.00

Cash in Hand 0.00 0.00 227511.65 257846.54 303348.87 0.00Cash Surplus, Finance Available 0.00 1736582.28 7972396.91 16707831.15 24594894.36 21689810.06

Securities 0.00 0.00 0.00 0.00 0.00 0.00

2. Total Fixed Assets, Net of Depreciation 13863150.00 27726300.00 25105240.00 22484180.00 19863120.00 17242060.00

Fixed Investment 0.00 13203000.00 26406000.00 26406000.00 26406000.00 26406000.00

Construction in Progress 13203000.00 13203000.00 0.00 0.00 0.00 0.00

Pre-Production Expenditure 660150.00 1320300.00 1320300.00 1320300.00 1320300.00 1320300.00

Less Accumulated Depreciation 0.00 0.00 2621060.00 5242120.00 7863180.00 10484240.00

3. Accumulated Losses Brought Forward 0.00 0.00 0.00 0.00 0.00 0.00

4. Loss in Current Year 0.00 0.00 0.00 0.00 0.00 4316438.35

TOTAL LIABILITIES 13863150.00 29462882.28 36343709.98 42893560.64 48812778.46 43248308.41

5. Total Current Liabilities 0.00 0.00 1963636.36 2225454.55 2618181.82 0.00Accounts Payable 0.00 0.00 1963636.36 2225454.55 2618181.82 0.00

Bank Overdraft 0.00 0.00 0.00 0.00 0.00 0.00

6. Total Long-term Debt 8317890.00 17677729.37 17677729.37 14731441.14 11785152.91 8838864.68

Loan A 8317890.00 17677729.37 17677729.37 14731441.14 11785152.91 8838864.68

Loan B 0.00 0.00 0.00 0.00 0.00 0.00

7. Total Equity Capital 5545260.00 11785152.91 11785152.91 11785152.91 11785152.91 11785152.91

Ordinary Capital 5545260.00 11785152.91 11785152.91 11785152.91 11785152.91 11785152.91

Preference Capital 0.00 0.00 0.00 0.00 0.00 0.00

Subsidies 0.00 0.00 0.00 0.00 0.00 0.00

8. Reserves, Retained Profits Brought Forward 0.00 0.00 0.00 4917191.34 14151512.04 22624290.82

9. Net Profit After Tax 0.00 0.00 4917191.34 9234320.70 8472778.78 0.00

Dividends Payable 0.00 0.00 0.00 0.00 0.00 0.00Retained Profits 0.00 0.00 4917191.34 9234320.70 8472778.78 0.00

Annex 5: Projected Balance Sheet (in Birr): Continued

PRODUCTION

5 6 7 8 9 10

TOTAL ASSETS 47571518.86 54060316.04 60796601.43 70726663.27 80656725.10 90586786.94

1. Total Current Assets 32950518.86 41746316.04 50789601.43 63026663.27 75263725.10 87500786.94

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Inventory on Materials and Supplies 571365.75 571365.75 571365.75 571365.75 571365.75 571365.75

Work in Progress 287289.22 287289.22 287289.22 287289.22 287289.22 287289.22

Finished Products in Stock 574578.44 574578.44 574578.44 574578.44 574578.44 574578.44

Accounts Receivable 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82

Cash in Hand 303348.87 303348.87 303348.87 303348.87 303348.87 303348.87

Cash Surplus, Finance Available 28595754.76 37391551.94 46434837.34 58671899.17 70908961.01 83146022.84Securities 0.00 0.00 0.00 0.00 0.00 0.00

2. Total Fixed Assets, Net of Depreciation 14621000.00 12314000.00 10007000.00 7700000.00 5393000.00 3086000.00

Fixed Investment 26406000.00 26406000.00 26406000.00 26406000.00 26406000.00 26406000.00

Construction in Progress 0.00 0.00 0.00 0.00 0.00 0.00

Pre-Production Expenditure 1320300.00 1320300.00 1320300.00 1320300.00 1320300.00 1320300.00

Less Accumulated Depreciation 13105300.00 15412300.00 17719300.00 20026300.00 22333300.00 24640300.00

3. Accumulated Losses Brought Forward 0.00 0.00 0.00 0.00 0.00 0.00

4. Loss in Current Year 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL LIABILITIES 47571518.86 54060316.04 60796601.43 70726663.27 80656725.10 90586786.94

5. Total Current Liabilities 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82

Accounts Payable 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82Bank Overdraft 0.00 0.00 0.00 0.00 0.00 0.00

6. Total Long-term Debt 5892576.46 2946288.23 0.00 0.00 0.00 0.00

Loan A 5892576.46 2946288.23 0.00 0.00 0.00 0.00

Loan B 0.00 0.00 0.00 0.00 0.00 0.00

7. Total Equity Capital 11785152.91 11785152.91 11785152.91 11785152.91 11785152.91 11785152.91

Ordinary Capital 11785152.91 11785152.91 11785152.91 11785152.91 11785152.91 11785152.91

Preference Capital 0.00 0.00 0.00 0.00 0.00 0.00

Subsidies 0.00 0.00 0.00 0.00 0.00 0.00

8. Reserves, Retained Profits Brought Forward 18307852.47 27275607.67 36710693.08 46393266.71 56323328.54 66253390.37

9. Net Profit After Tax 8967755.20 9435085.41 9682573.62 9930061.83 9930061.83 9930061.83

Dividends Payable 0.00 0.00 0.00 0.00 0.00 0.00

Retained Profits 8967755.20 9435085.41 9682573.62 9930061.83 9930061.83 9930061.83

High School Project

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