Refer to the attachment.

After the fifth year the cashflows available to XYZ from ABC is expected to grow by 10%% per annum in perpetuity. ha ABC will retain Shs 40,000 for intemal expansion every year. The cost of capital can be assumed to be 18%. REQUIRED: Estimate the annual cash flows. Determine the maximum amount XYZ would be willing to acquire ABC at.XYZ Lid. is considered acquiring ABC Lid. The following information relates to ABC Lid. for the next five years. The projected financial data are for the post-merger period. The corporate tax rate is 40% for both companies. Amounts are in Sha *000' 1994 1995 1996 1997 2011 Net saks 1.050 1,260 1,510 1,740 1,910 Cost of sales 735 882 1,057 1,218 1.337 Selling & admin. expenses 120 130 150 160 Interest expenses 50 70 90 110 Other informationXYZ Ind is considering three possible capital projects for next year. Each project has a I year life, and project returns depend on next years state of the economy. The estimated rates of return are shown below. STATE OF THE PROBABILITY RATE OF RETURN ECONOMY OF OCCURRENCE A B C Recession 025 10%% 14% Average 14 13 12 BOOM 16 10 REQUIRED: Find each project expected rate of return, variance, standard deviation and coefficient of variation.b. Compute the correlation coffic in between A and B 11. A and C Band C C. Compute the expected return on a portfolio if the firm invests equal wealth on each act. 1. Compute the stand eviation of the portfolio