Kigali Group Ltd and is considering some projects for possible investment. Three of such projects of vital interests which is currently under scrutiny are Cassava Processing, Rubber Processing and Inter-City Transport Service. The expected Profit After Tax (PAT) with their probabilities, as well as other details concerning these projects are as follows: Cassava Processing Probability profit after Tax (rwf'000) 0.3 0.2 0.5 Rubber Processing Probability profit after Tax (rwf'000) 4,000 0.3 3,000 0.2 5,000 0.5 Inter-City Transport Probability profit after Tax (rwf'000) 4,000 0.2 6,000 0.4 4,000 0.3 0.1 3,000 4,000 6,000 7,000 Investment cost Project life Capital allowance Residual value Rwf12.0M 8 years 12.5% Rwf15.0M 0 Rwf14.0M 8 years 12.5% 10 years 10% 0 Cost of capital 16% 20% 22% Required: a. i) What do the probabilities represent? li) Determine the risk associated with each project (find the cash flow first) 0 b. Compute the Net Present Value for each Project (see present value factors below) Year (n) 16% 20% 22% 1 0.862 0.833 0.820 2 3.274 2.991 2.864 8 4.344 3.837 3.619 10 4.833 4.192 3.923 c. Based on your results in (a) and (b) above, recommend two projects for Kigali Group Ltd.