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The following information has been provided to you. Firm A Balance Sheet as at 31 March 19XX Cash Accounts receivable Buildings Plant & equipment (net)

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The following information has been provided to you. Firm A Balance Sheet as at 31 March 19XX Cash Accounts receivable Buildings Plant & equipment (net) Land 65.000 126,000 293,650 455,500 491.500 $1.431.650 Accounts payable Bank overdraft Term loan Owner's equity 522.500 65,300 692.000 151,850 $1.431.650 Net Income 70,000 Interest expense = 64,000 Buildings, Plan and Equipment are at book value (net). Firm B Balance Sheet as at 31 March 19XX Cash Accounts receivable Buildings Plant & equipment (net) Land 63,500 235.500 398,500 457,300 19.620 $1.174.420 Accounts payable Bank overdraft Term loan Owner's equity 195,500 50.000 324.000 604,920 $1.174.420 Net Income 100,000 Interest expense = 28,000 Buildings, Plan and Equipment are at book value (net). i. Compute and explain the ratios of return on asset, debt/equity, return on equity for each firm. By explain, mean to explain what the ratios means to the firm and associated stakeholders. 24 points ii. Compare the firms in terms of shareholder satisfaction and management abilities to manage assets. Explain how each of these are measured, the value of the measures and compare the results between the firms. 6 points ili. Compare the level of financial risk of each firm and their exposure to business risk. By exposure I mean - how vulnerable are they when business risk (i.e., unexpected price and quantity changes resulting in lower net income) occurs. Bes sure to note how each of financial and business risk are measures and then compare the values/exposure. 6 points

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