Refer to the attachment.

Gome Drug Products Lid (GDPL) is faced with several possible investment projects. For each, the total cash outflows required will occur in the initial period. The cash outflows expected net present values and standard deviations are as follows: Project Cost Sh. '000" Net present value Standard deviations 10,000 1.000 2.000 5,000 1,000 3,000 20,000 2,500 1,000 1,000 500 1.000 50,000 7.500 7,500 All projects have been discounted at a risk-free rate of 8% and it is assumed that the distribution of their possible net present values are normal, REQUIRED: (a) Construct a risk profile for each of these projects in terms of the profitability index (5 marks) Ignoring size problems do you find some projects clearly dominated by others? (5 marks) (c) What is the probability that each of the projects will have a net present value 0 (10 marks) (Total: 20 marks)The following information relates to the operations and capital structure of Kagocho Company Lid. Installed capacity 1200 units Actual production 800 units Selling price/unit Sh.15 Variable cost/ unit Sh. 10 Fixed cost Sh. Situation A 1000 Situation B 2013 Situation C 3000 Capital Structure Financial Plan 1 2 3 Sh. Sh. Sh. Equity 5,000 7,500 2,500 Debt 5.000 2,500 2.500 Cost of debt (For all plans) REQUIRED:- Determine operating leverage under situations A,B and C respectively (6 mark Determine financial leverage under financial plans 1, 2 and 3 respectively (6 marl Determine the highest and lowest value of combined leverage (6 mark (b) How are the above calculations useful to the financial manager of a company? (2 marl (Total: 20 mark