Describe the effect of adding debt to a company's balance sheet has on the company's ROA versus its ROE. Specifically, why does ROE vary more widely for any given change in performance when the company acquires more debt? Use as an example an all-equity firm with total assets of \(\$ 100,000\) and net income of \(\$ 10,000\) compared to a 50 percent equity-financed firm with the same income and a 5 percent cost of debt. Then do the same analysis with a \(\$ 2,000\) net income. Ignore taxes.