4. Understanding business and financial risks Aa Aa 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: Blue Strawberry Manufacturing Company and Blue Mouse Production Inc. It is your job to evaluate the relative business and financial risks of Blue Strawberry and Blue Mouse 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 Blue Strawberry's and Blue Mouse's major attributes: Blue Strawberry Blue Mouse Total assets Total debt Expected NOPAT Standard deviation of expected NOPAT Manufacturing Inc. Production Inc. $4,400,000 $4,400,000 $880,000 $1,056,000 $255,200 $2,420,000 $1,056,000 $171,600 Use the given financial data to indicate which firm has the higher degree of each type of risk. Which firm has more financial risk? Which firm has more business risk? O Blue Strawberry O Blue Mouse O Blue Mouse O Blue Strawberry