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Please use the following information to answer questions 6-8. In 2020 Smile Inc. had a net income of $10 million on sales of $100 million.
Please use the following information to answer questions 6-8. In 2020 Smile Inc. had a net income of $10 million on sales of $100 million. The firm had total assets of $200 million, which were financed using debt and equity in equal proportions. Their primary competitor, Frown Inc. had total assets of $200 million, $80 million in equity, sales of $80 million, and profit margin of 10%. 6. What was the return on equity for Smile? For Frown? 7. What was the equity multiplier for Smile? For Frown? 8. Which firm is likely to have better prospects? Why
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