Econ. 3020: Managerial Economics Homework No. 4: Financial Feasibility Analysis of an Agricultural Development Project in the Philippines The Government of the Philippines (GOP) has requested the United States Government (USG) a $20 million loan to finance the construction of an irrigation system and for the purchase of fertilizer to increase the production of rice. If the loan application is approved, it will carry a 25 year repayment period at 5% rate of interest per year, with the first five years given as a grace period. You have been hired as a consultant of the Agency for International Development to prepare the financial feasibility analysis of this loan application for a consulting fee of $200,000. Your contract with the Agency for International Development requires you to submit two documents, namely, 1. An action Memorandum to the U.S. Ambassador to the Philippines advising him to recommend approval or disapproval of the proposed application based on your analysis. This analysis includes
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