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Case Exercise of MI Project

Case Exercise of MI Project. Minor Irrigation Project. A farmer having a water source like open well or canal nearby would like to invest on a pump-set to lift the water. Presently, he is cultivating only single crop and getting a net benefit of Rs.3,000/- per year.

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Case Exercise of MI Project

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  1. Case Exercise of MI Project

  2. Minor Irrigation Project A farmer having a water source like open well or canal nearby would like to invest on a pump-set to lift the water. Presently, he is cultivating only single crop and getting a net benefit of Rs.3,000/- per year. 2. On installation of pump-set, it would be possible to take two crops with some additional expenditure.During the first year production, expenditure is estimated as rs.4500/- for single crop, with a projected benefit if Rs.8,000/-. 3. Second year onwards, it is assumed that the farmer would take up 2 crops in a year with the production expenditure of Rs.7,000/- and a benefit of Rs.12,000/-

  3. Installation of pump-set to lift water Project cost: Rs.6000 i.e cost of pump-set Gestation period: 6 months Useful life of pump-set: 9 yeras

  4. Cash Flow Statement Total net benefit: Rs. 16,500 Total investment: Rs.6,000

  5. Calculation of NPW and BCR Present value of net benefit:Rs.8239 Investment :Rs.6000

  6. Calculation of NPW and BCR NPW=PWB-PWC=53784-51545=2239 BCR=PWB/PWC=53784/51545-1.04:1

  7. Calculation of IRR IRR = 20+5 *813/813-(-)274= 20+5*813/1087= 23.749

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