Required: (a) Compute the net present value of this project. (b) Briefly assess the use of multivariate models [Arbitrage Pricing Model] to overcome [10 marks] the Capital Asset Pricing Model (CAPM) as a single factor model. Word count requirement for part b is 100. Academic references: minimum 2) [5 marks] Question 2 In September 2015, H.J. Heinz (Heinz') and Kraft Foods Group (Kraft) completed the merger. This merger created the fifth largest food company in the world. Warren Buffett's Berkshire Hathaway and 3G Capital, the owners of Heinz, ended up with a 51% stake in the new Kraft Heinz company (NASDAQ stock code: KHC), Kraft shareholders received the other 49% stake and a special cash dividend of $16.50 per share as a deal sweetener. Each share of Kraft entitled the shareholder to one share of the new entity. a. Discuss the synergies faced by Heinz and Kraft arising from the merger. For data before the merger, use data from 2012 to 2014. To evaluate the effects of the merger, use data from 2016 to the first half of 2017. [10 marks] b. Test if the merger theory, presented in equation form [ PV (Acquirer) PV (Target)