Question: QUESTION TWO (15 MARKS) i. Explain using examples how the avoidance of cognitive dissonance can affect the investor's decision making process. (5 Marks) ii. Karatazi

QUESTION TWO (15 MARKS) i. Explain using examples how the avoidance

QUESTION TWO (15 MARKS) i. Explain using examples how the avoidance of cognitive dissonance can affect the investor's decision making process. (5 Marks) ii. Karatazi Ltd, which has a cost of capital of 12 per cent, is considering the investment of Kshs. 7m in an improved moulding machine project with a life span of four years. The garden ornaments produced will retail at Kshs. 9.20 each and cost Kshs. 6 each to make. It is expected that 800,000 ornaments will be sold each year. 1 L Required: Using sensitivity analysis determine the key variables to this investment for the project? (10 Marks)

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