15. a- What is meant by cost of capital? 25 Marks) b- What is risk and uncertainty? How would you differentiate between Objective Probabilities" and "Subjective Probabilities"? 16. The management of Yafraid International is considering new two-year project to establish new set of electronic parts for one of its buyer. The probability distribution of this project in two years is given below: Year 1 Year 2 Return Probability Return Probability 12,000 0.15 6,000 0.34 15,000 0.54 12,000 0.66 18,000 0.31 The events in each year are independent of other years (that is, there are no conditional probabilities). An outlay of OMR 22,500 is payable at Time 0 and the other cash flows are receivable at the year ends. The risk-adjusted discount rate is 9.5 per cent. Calculate: a). The expected NPV: b). The standard deviation of NPV