Question $4$

Defre the thr ee types of synergy that mary resul fiom mergers. What are the sourcin of thene

synergies? Clive a pribticel example to ebch bype of wyriegy.

Question $5$

Your division is corsiderirg wo irwestriert propiects, each of with requires an up$-$tront

wpendhure of FQ$5$ milion. You indimete that the cow: of captal is $10\%$ ard that the irvestmerts

all produce the following ahar$-$tex cash flows $($R miliars$).$

Peg$-$ired:

$5\mathrm{.}1.$ What is the regular pastack period for each of the propacts?

What is the dhoounted pirybeck period for each of the projects?

$5\mathrm{.}3.$ If the teo projects are independert and the cost of caphal is $1056,$ which project of

projects whould the compary undertike?

$5\mathrm{.}4.$ If the wo projects are minully axubasive and the cont of captal is $5\%.$ Which pesject or

projects whould the compary undertibe?

$5\mathrm{.}5.$ If the beo projects are munully exsusive and the cant of eapial is $15\%,$ which project of

propocts should the compary undertibe?

Question $6$

$5$ Marks

Tabet industies is considering a proposed project for its caplad budget. The compeny

endinates the projecrs NPV s F$12$ milion. This esimate assumes thet the tcopomy and maket

condtbors all be aver age over next few years. The company$/$s CFO, homever, forecinss there

who performed the following scinario anelyile.

Peq$-$ired:

Whit is the propacts:

Q$\mathrm{.}1.$ Exeected NPV

Q$2.$ Srindard deviation, and

Q$.3$ Coeffiert of variatioa?