Analysis and investors often use return on equity (ROF) to compare profitability of a company with other firms in the industry. ROF is considered a very important measure, and managers strive to make the company's ROF numbers look good. If a firm takes steps that increase its expected future ROF, its stock price will_increase. Based on your understanding of the uses and limitations of ROE, which of the following projects will a manager likely choose if his or her bonus is solely based on the ROF of the next project? Project X, with 35% ROF and a large investment, generating high expected cash flows Project Y, with 40% ROF and a small investment, generating low expected cash flows Suppose you are trying to decide whether to invest in a company that generates a high expected ROE, and you want to conduct further analysis on the company's performance. If you wanted to conduct a comparative analysis for the current year, you would: Compare the firm's financial ratios with other firms in the industry for the current year Compare the firm's financial ratios for the current year with its ratios in previous years You decide also to conduct a qualitative analysis based on the factors summarized by the American Association of Individual Investors (AAII). According to your understanding, a company with less competition is considered to be risky than companies with multiple competitors