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Question 2 Jo Saka Co . , a vibrant start - up construction company in Zambezia, has now diversified its business using the on -
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Jo Saka Co a vibrant startup construction company in Zambezia, has now diversified
its business using the onbalance sheet funding modality. Its major equity partner, Jo
Mbuzi, has invested ZK which can be invested across five portfolio within its
business mandate. Table below provides a table of all active portfolio to be invested
in
Table : Jo Saka Co onbalance sheet portfolio
Jo Saka Co limits total investment in any single project to a maximum of ZK
and has decided not to borrow additional funds. For any funds uninvested, Jo Saka
Co can earn eight percent per annum for investing in Zambezia government bonds
that are open for investment. Returns from investments can be immediately
reinvested. For instance, the positive cash flow received from project WT at time
can immediately be reinvested in project GE Table provides an outlay of net
cashflows associated with an investment of ZK in each project.
Table : Outlay of net cashflows by Investment
Time Present, Time Yr Time Yr and Time YrYr Year
For instance, ZK invested in investment GE requires a cash outflow in Yr and
returns ZK Yr and ZK in Yr
Formulate the investment plan that will maximize cash on hand in Yr
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