1.

10 marks

Asset Return	Liabilities & Equity Return
Asset A $10,000 30%	Liability $1,000 16%
Asset B 2,000 12%	Liability D (2,500) ?
	Equity B 13,500 26%

Calculate the return on Liability D as the weighted average of the returns on the other financial instruments? 5 marks. In calculating the return on liability D, what is the weight attached to Asset A? 3 marks. Is Liability D really a liability? Explain. 2marks.