A firm considers an investment of $100M in a new factory. The investment is expected to have 5% Return on Assets (ROA). Firm is considering two alternative ways to finance the investment: - Option A: Issue $100M of new stock - Option B: Issue $20M of new stock and take a $80M loan with interest rate of 4%. Which of following statements is true? Select one: O a. The Return on Equity (ROE) in the option A is 5% and in the B RoE is 9%. O O b. The Return on Equity (ROE) in the option A is 5% and in the B RoE is 6.25%. c. The Return on Equity (RoE) is 5% in both options. d. The Return on Equity (ROE) in the option A is 5% and in the B RoE is 25%. A firm acquires another firm for $10 million this year and expects to get 2 million cost savings next year, and 5 million cost savings for three years after that. With a discount rate of 10%, what is the Net Present Value (rounded to million dollars) of the acquisition (without any terminal value). Select one: O a. $7M b. $21M o C. $3M d. not possible to calculate Firms A, B, and C produce similar products. The products' prices are A: $11, B: $10, and C: $9. Firms' cost of products are: A: $4, B: $5, and C: $4.5. Who would be best positioned for a cost leadership strategy? Select one: O a. A O b.B I c. C 0 0 0 d. It can't be said based on this information