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B would you prefer to invest in? Why? (5 marks) b) Mr. Said has to make a choice between two mutually exclusive investments Investment Cash

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B would you prefer to invest in? Why? (5 marks) b) Mr. Said has to make a choice between two mutually exclusive investments Investment Cash flows (Shs '000) IRR (%) TO 1 T: -800 500 600 22 Y -400 280 36 The opportunity cost of capital i 9% per annum. Mr. Said wants to invest in Y, which has the higher IRR. Do you agree with his choice? Show appropriate computations. (6 marks) Giving reasons, explain the expected financial risk and business risk in a mature business. (5 marks 358

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