2. Understanding business and financial risks The total risk in a firm is determined by evaluating the firm's business risk and financial risk. As an analyst, Olivia is comparing two nearly identical manufacturing firms Red Hamster Manufacturing Company and Purple Tiger Production Inc. It is your job to evaluate the relative business and financial risks of Red Hamster and Purple Tiger The two firms have the same level of total assets and expected net operating profit after taxes (NOPAT), but they differ in two critical characteristics total debt and the standard deviation of the expected NOPAT. The following table outlines some of Red Hamster's and Purple Tiger's major attributes Totales Total dat Expected NOPAT Standard deviation of expected NOPAT Red Hamster Manufacturing Company 54,400,000 $2,200,000 51,056,000 5294,800 Purple Tiger Production Inc. $4,000,000 $880,000 51,056,000 $189,200 Use the given financial data to indicate which firm has the higher degree of each type of risk Use the given financial data to indicate which firm has the higher degree of each type of risk. Which firm has more business risk? O Red Hamster Purple Tiger Which firm has more financial risk? Red Hamster Purple Tiger