MOST IMPORTANTLY IF YOU CAN FIND OUT THE ORIGIN OF THIS QUESTION (BOOK OF ORIGIN).

Strike-3 Corp. and HR Derby Inc. both manufacture and sell baseball gloves. Strike-3 has variable production costs of $55 per unit and fixed assets of $60 million, which have a useful life of 4 years with no salvage value. On the other hand, HR Derby has a cost per glove of $56, and fixed assets of $54 million (also with a four year useful life and no salvage value). Strike-3 has a debt-to- equity ratio of 1.5, while HR Derby's management feels more comfortable with a D/E ratio of only 1. The entire baseball glove market sells 10 million units per year at $62 each, and market share is divided evenly between these two companies. Striker-3 aims to have a DTL of 1.9, while HR Derby's goal is to have a DTL of 2. Both companies depreciate their fixed assets through the straight-line method. Assume both companies have no other fixed assets nor liabilities. a. b. Calculate DOL for both companies. What is the interest rate that each company would need to arrive at their respective target DTL. Calculate QOBE for both companies. Calculate QBE for both companies. C. d. Strike-3 Corp. and HR Derby Inc. both manufacture and sell baseball gloves. Strike-3 has variable production costs of $55 per unit and fixed assets of $60 million, which have a useful life of 4 years with no salvage value. On the other hand, HR Derby has a cost per glove of $56, and fixed assets of $54 million (also with a four year useful life and no salvage value). Strike-3 has a debt-to- equity ratio of 1.5, while HR Derby's management feels more comfortable with a D/E ratio of only 1. The entire baseball glove market sells 10 million units per year at $62 each, and market share is divided evenly between these two companies. Striker-3 aims to have a DTL of 1.9, while HR Derby's goal is to have a DTL of 2. Both companies depreciate their fixed assets through the straight-line method. Assume both companies have no other fixed assets nor liabilities. a. b. Calculate DOL for both companies. What is the interest rate that each company would need to arrive at their respective target DTL. Calculate QOBE for both companies. Calculate QBE for both companies. C. d