Q$\mathrm{.}1$

A company has a budget of shs$\mathrm{.}400$million to invest in the coming year. It has an option of five projects all of which increase the value of the firm.

Project NPV$($ millions$)$ Initial Outlay $($millions$)$

A $1445$

B $58120$

C $87180$

D $3270$

E $92230$

a$)$ Rank the projects in the order of profitability $(5$ marks$)$

b$)$ Assuming the projects are not mutually exclusive, select a combination of projects that you

will advise the company to undertake. $(5$ marks$)$

c$)$ What do understand by capital rationing and explain the causes of capital rationing in a firm. $(10$ marks$).$

d$)$ Identify the drivers of costs of doing business with reference to a Country of your choice and suggest practical ways through which the high cost of doing business can be reduced.$(30$