Return to the example summarized in Table 8.3, in which a fi rm purchases a

$1,000 computer. Assume that the fi rm has only 20 percent equity outstanding, so it needs an $800 loan. Managers expect revenue of $200 in good times and

$100 in bad times. Compute the percentage change in revenue and profi ts (revenue minus interest payments) if revenue is $200 in the fi rst year and $100 in the second year. Then compute the return to the stockholders in each year.