(1) Complete the following partial income statements and the set of ratios for Firm L. Assets Equity Probability Sales Operating costs Earnings before interest and taxes Interest (12%) Earnings before taxes Taxes (40%) Net income Net income ROE = Common equity EBIT TIE = Interest Expected ROE Expected TIE OROE OTIE $20,000 $20,000 0.25 $ 6,000 (4,000) $ 2,000 0) $ 2,000 ( 800) $ 1,200 6.0% Firm U $20,000 $20,000 0.50 $ 9,000 (6,000) $ 3,000 0) $ 3,000 (1200) $ 1,800 9.0% 9.0% 2.1% Ox $20,000 $20,000 0.25 $12,000 (8,000) $ 4,000 0) $ 4,000 (1 ,600) $ 2,400 12.0% $20,000 $10,000 0.25 $ 6,000 (4,000) $ 2,000 (1200) $ 800 ( 320) $ 480 4.8% Firm L $20,000 $10,000 0.50 $ 9,000 (6,000) $ 3,000 x 10.8% 4.20/0 $20,000 $10,000 0.25 $12,000 (8,000) $ 4,000 1200) $ 2,800 (1,120) $ 1,680 16.8%