QUESTION ONE You have been recently appointed as management accountant of Bulimi limited located in Chisamba area that deals in agricultural supplies. You are the only member of staff with any real understanding of accounting and financial issues .The directors are considering making a major investment in providing a new service for their farmer customers. You have helped with estimating the potential cash flows from this investment. You have also, with the help of the directors looked at the range of feasible outcomes for each of the items of input data and ascribed probabilities to various outcomes for each of these input data. Using all this information you have: 1. Carried out net present value (NPV) assessment of the best estimates of the cash flows and have found a significant positive outcome. 2. Carried out sensitivity analysis on the positive NPV 3. Derived the expected NPV using the expected values of each of the items of the input data. You are due to present this information to the directors, but you feel that it would be a good idea to include some notes to them. Required: a) Draft a report to the directors explaining why you have used the NPV approach, what sensitivity analysis is and what the expected value means. You should also discuss how useful the results of these three analyses are in helping the directors to making a decision. (13 marks) b) Share holder value analysis (SVA) as a tool, suggests that all business activities, including strategic decisions and performance evaluation, should be managed with the objective of maximising the present value of the firm. Shareholders value the future cash returns that their investments will generate. Hence companies that consistently destroy shareholder value will find themselves lacking capital and resulting in poor performance. Required: Discuss any FIVE (5) of the value drivers that SVA approach to business focuses upon. (12 marks)