Instructions a. Assume that you are a banker and that each company has applied to you for a 90-day loan of $12.000. Which would you consider to be the more favorable prospect? Explain your answer fully. b. Assume that you are an investor considering purchasing all the capital stock of one or both of the companies. For which business would you be willing to pay the higher price? Do you see any indication of a financial crisis that you might face shortly after buying either company? Explain your answer fully. (For either decision, additional information would be useful, but you are to reach your decision on the basis of the information available.) Using Statements of Cash Flows John Marshall is employed as a bank loan officer for First State Bank. He is comparing two companies that have applied for loans, and he wants your help in evaluating those companies. The two companies-Morris. Inc.. and Walker Company-are approximately the same size and had approximately the same cash balance at the beginning of year 1. Because the total cash flows for the three-year period are virtually the same. John is inclined to evaluate the two companies as equal in terms of their desirability as loan candidates. Abbreviated information (in thousands of dollars) from Morris. Inc.. and Walker Company is as follows. Instructions a. Do you agree with John's preliminary assessment that the two companies are approximately equal in terms of their strength as loan candidates? Why or why not? b. What might account for the fact that Walker Company's cash flow from financing activities is zero in year 3? c. Generally, what would you advise John with regard to using statements of cash flows m evaluating loan candidates