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hi I need help with this, You have the following information about two firms, Debt Free, Inc. and Debt Spree, Inc. Both firms have the

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hi I need help with this,

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You have the following information about two firms, Debt Free, Inc. and Debt Spree, Inc. Both firms have the same prospects for sales and EBIT, and both have the same level of assets, tax rate and borrowing rate. They differ in their use of debt financing. Scenario Sales 5311' Bad ye ar 2 0 0 1 6 Normal year 275 40 Good year 3 8 0 4 7 [ Debt Free Debt Spree Total assets 250 250 Tax rate 35 is 35 is Debt 0 1 5 0 Equity 2 5 0 1 0 0 Borrowing rate 1 6 % 1 6 % Calculate the interest expense for each firm: Interest expense for Debt Free 33 Interest expense for Debt Spree $ Calculate the following items for each rm for each scenario (bad year, normal year, good year): return on assets (ROA). net profit, and return on equity (ROE). (Use a minus sign to indicate negative answers. Round your answers to 2 decimal places.) Debt Free Debt Spree Scenario ROA Net Profit ROE RDA Net Profit ROE Bad year % % % % Normal year % % % % Good year % % % %

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