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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
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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
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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.
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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
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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)
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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
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overcro
wded
schools,
maintai
n and
expand
other
facilities
. The
task of
constru
ction
requires
technica
l skills,
capital
and
immens
e work,
which
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Equity
Equityis
expecte
d to
address
the
questio
n of
gender
and
zonal
gaps.
In
2003/04
the
gross
particip
ation
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seconda
ry
educati
on is
shown
in table
4.
The
disparit
y
among
the
zones
above
the
regional
average
reads
as;
Bahir
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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%)
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gender
parity
index is
highest
at
North
Gonder
zone
and
lowest
at
South
Wollo,
Oromiy
a and
North
Wollo
zones.
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daryEduca
tionfor
2000/01 byZone
Zone
In the
Amhara
Region,
the
provisio
n of
social
services
by the
private
sector is
almost
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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
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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)
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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.
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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
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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
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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
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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
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or areas
of
training
which
will
prepare
them
adequat
ely for
higher
educatio
n and
for
work)
The
compreh
ensive
secondar
y
educatio
( d
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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
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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
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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
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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
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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
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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
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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
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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
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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
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Abst
ract,
1994
E.C(200
1/02)
Pri
mar
y
Shif
t
Syst
em
1
2,448
Lat
rine
1024
(24.5
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l
sch
ools
,
3,06
0
are
loca
ted
in
Am
har
a
Reg
ion,
of
whi
ch
2,97
5
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ools
,
res
pect
ivel
y.
The
Pri
mar
y
sch
ools
hav
e a
tota
l of
25,6
57
sect
ions
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Sec
ond
ary
sch
ools
hav
e
1,55
6
Sect
ions
serv
ing
119,
986
stu
den
ts.
In
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stu
den
t-
sect
ion
rati
o of
eac
h
Reg
ion.
In
this
res
pect
,
stu
dents
per
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in
Am
har
a
Reg
ion
(75.
9)
nex
t to
SN
NP
R
(79.
72)
am
ong
populat
ed
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Sec
ond
ary
Sch
ools
are
hig
her
in
So
mal
i
Reg
ion
(13
4.7)
Foll
owed
by
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0.75
586
526
454
Reg
ion9
.17.
48.3
0.85
079
423
341
Sou
rce:
DSA
,
ANR
S'
pote
ntial
Asse
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Sou
th
Wol
lo12
.28.
410.
30.6
538
043
164
2No
rth
Wol
lo7.
74.5
6.10
.660
793225
32
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uth
Gon
dor
Mal
e
C.
Qu
alit
y
Qua
lity
in
edu
cati
on
is a
nec
essit
y
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cont
ent,
lear
ning
envi
ron
men
t,
proc
esse
s,
mod
e of
asse
ssm
ent
plus
internal
effi
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ulati
on
in
the
peri
od
199
6/97
-
200
0/01
was
14.6
2%,
whil
e
that
ofteac
hers
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per
sect
ion
&
per
teac
her
affe
ctin
g
qual
ity
neg
ativ
ely.
In
the
period
und
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qual
ifie
d
teac
hers
was
41
%
mal
e &
33
%
fem
ale).
59
%
of
theteac
hing
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ifie
d.
The
afor
eme
ntio
ned
pro
ble
ms
cou
pled
with
shor
tage
and
poo
rqual
ity
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ng
othe
r
thin
gs
by
revi
ewi
ng
tren
ds
in
repe
titio
n
rate,
dro
poutrate,
pro
7/30/2019 High School Project
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edu
cati
on
dev
elop
men
t
pro
gra
m
(ES
DP-
200
3-
200
5)
of
theAN
RS
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sure
s of
inte
rnal
effi
cien
cy,
Exc
ept
for
grad
uati
on
rate.
Thu
s,
pro
motion
rate
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m
72.5
2%
in
200
2/03
.
Rep
etiti
on
rate
and
dro
p
out
rate
shal
l bedecr
ease
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edu
cati
on
perf
orm
anc
e of
the
Reg
ion
dem
and
s an
over
all
imp
rove
ment
with
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Sust
aina
ble
dev
elop
men
t is
abo
ut
enh
anci
nghum
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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
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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.
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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.
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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
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- 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.
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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
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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
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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%.
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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
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ANNEXES
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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
1
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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
2
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Annex 2: Cash Flow Statement (in Birr)
CONSTRUCTION PRODUCTION
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
2. Inflow Operation 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00
Sales Revenue 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00
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 19712237.12 15204202.82 14956714.60 11762938.17 11762938.17 11762938.17
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
Pre-production Expenditures 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
7. Corporate Tax Paid 3843323.66 4043608.03 4149674.41 4255740.79 4255740.79 4255740.79
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
TOTAL CASH INFLOW 0.00 0.00 18000000.00 20400000.00 24000000.00 0.00
1. 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
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
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
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
6. Corporate Tax Paid 0.00 0.00 0.00 0.00 3631190.90 0.00
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
TOTAL CASH INFLOW 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00
5
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1. Inflow Operation 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00
Sales Revenue 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00
Interest on Securities 0.00 0.00 0.00 0.00 0.00 0.00
2. Other Income 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL CASH OUTFLOW 13087103.32 11550805.41 11656871.79 11762938.17 11762938.17 11762938.17
3. Increase in Fixed Assets 0.00 0.00 0.00 0.00 0.00 0.00
Fixed Investments 0.00 0.00 0.00 0.00 0.00 0.00
Pre-production Expenditures 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)
CONSTRUCTION PRODUCTION
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