Answer Happy

Aboabo Oil Mills ltd was incorporated in 2022 to undertake a
vegetable oil milling business. The consultant investment analyst
has provided the following information as the bases for estimates
of costs and revenues.
1. Investment costs in the first year (2022)
are:




GH₵
Land



100,000
Buildings



200,000
Plant, machinery and equipment

500,000
Total



800,000
2. Plant capacity: processing of 5,000 tons of
oilseed/year to produce, from Year 1:
Oil 15% 750 ton/year
Meal 80% 4,000 ton/year Processing losses 5%
In Year 1, about 90% of capacity is expected to be used.
In Year 0 the plant would be installed and no use would be
made.
3. Sales prices: GH₵ 500/ton oil; GH₵ 300/ton
meal.
4. Raw material prices: GH₵ 200/ton oilseed.
5. Packing material: GH₵ 50/ton of oil
processed.
6. Labor: total wages per year are estimated at
GH₵ 100,000. In year 1, full wages would be paid.
7. Fuel use: 0.1-ton fuel per 1 ton oilseed
processed. Fuel price GH₵ 300/ton.
8. Overheads: administrative and marketing costs
are estimated at GH₵ 20,000/year.
9. Depreciation rates: building 3% p.a.
Plant machinery and equipment: 10% p.a.
10. Project life: assumed at 6 years.
You are required to accomplish the
following:
I. Capital investment schedule
II. Total depreciation schedule
III. Estimated inputs and costs schedule
IV. Estimated production and revenue schedule