Moon Corporation and Star Corporation are in the same line of business and both were recently organized, so it may be assumed that the recorded costs for assets are close to current market values. The balance sheets for the two companies are as follows at July 31, 2011: Assets Cash Accounts Receivable Land Building, Office Equipment MOON CORPORATION BALANCE SHEET JULY 31, 2011 Liabilities & Owners' Equity $ 18,000 Liabilities: 26,000 Notes Payable 37.200 (due in 60 days). 38.000 Accounts Payable 1.200 Total liabilities Stockholders' equity Capital Stock $60,000 Retained Earnings.. 38.400 $120,400 Total $ 12,400 9.600 $ 22,000 Total 98.400 $120,400 Assets Cash Accounts Receivable Land Building Office Equipment STAR CORPORATION BALANCE SHEET JULY 31, 2011 Liabilities & Owners' Equity $ 4,800 Liabilities: 9,600 Notes Payable 96,000 (due in 60 days) 60,000 Accounts Payable 12,000 Total liabilities Stockholders' equity: Capital Stock $72,000 Retained Earnings.... 44,800 $182.400 Total .... $ 22,400 43,200 65,600 Total 116.800 5182,400 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.)