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Apex leering is considering the purchase of an automated accounting system and is trying to decide betwer. oject A and project B. Both projects had

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Apex leering is considering the purchase of an automated accounting system and is trying to decide betwer. oject A and project B. Both projects had the same cost, but because of functionality differences, the patterns of cash flows are quite different. Apex uses a 15% required rate of return or discount rate to evaluate its investment. Evaluate whether Project A will be a potential contribution to the firm's value or Project B in terms of following basic capital budgeting criteria and give reason why or why not? i. NPV what you have learned in your business finance course. Specifically, you are evaluating an investment in a portfolio comprising two firms' ordinary shares. You have calculated the following information about the ordinary shares of firm A and firm B : What are the expected rate of return and the standard deviation in portfolio return? 1. If you invest half of your money in each of the fwo shares. 3 Marks i. If the correlation between the two investments is equal to 0 . 3 Marks ii. If the oorrelation between the two investments is equal to +1. 3 Marks iv. II the oorrelation between the two investments is equal to 1. 3 Marks v. Using your responses to Part i-Nv, descrbe how diversification affects the retums of a portfollo of investmerts

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