QUESTION TWO office at the corner of Moi and Kenyatta Avenues in Nairobi Central" District. The bank's economic department projects annual operating rev Sh.1.75 billion from services sold to generate fee income and annual bra operating expenses of Sh.880 million. The cost of procuring the property is Sh.2.5 billion and branch construction will total an estimated Sh.2.32 billion, the facility is expected to last 16 years. Maisha Bora Savings Bank has a minimum acceptable rate of return on its invested capital of 12 percent. ) Maisha Bora Savings Bank is considering the establishment of a new Required: Should the bank proceed with this branch office project? Why? Hint: Use NPV] (13 Mark s) (b) Liquidity planning requires monitoring deposit outflows. In each of situations, which of the outflows are discretionary and which are not? If the is not discretionary, predictable or unexpe answer. () In April, a farmer draws down his line of credit in order to purchase seed. (ii) The bank makes a preferred stock dividend payment. (iii) A fire destroys a portion of the local business district, and many firms apply for reconstruction loans. The bank pays rent on its offices. On the Friday before the Christmas holidays, all ATMs in town have been ibe (iv) (v) drained of cash. (vi) The bank buys most of the newly issued Treasury Securities. (12 Marks) TOTAL: 25 MARKS