To finance the capital investment of $$80,000,$ you are considering two choices. Choice A is $100\%$ equity financing $($or $0\%$ debt$)$ and Choice B is $50\%$ equity and $50\%$ debt financing at $10\%$ APR. $L$

Q$2$c: Suppose that you are relatively less risk$-$averse manager implying that you are willing to take more risk to get higher expected return.

Which combination of plans should be selected under Scenario A and why?

Q$2$d: Suppose that you are relatively more risk$-$averse manager implying that your decision is more likely to be based on the CV$.$

Which combination of plans should be selected under Scenario A and why?

Q$2$e: Suppose that you are relatively less risk$-$averse manager implying that you are willing to take more risk to get higher expected return.

Which combination of plans should be selected under Scenario B and why?

Q$2$f: Suppose that you are relatively more risk$-$averse manager implying that your decision is more likely to be based on the CV$.$

Which combination of plans should NOT be selected under Scenario B and why? Q$2$g: Compute the DFL of four combinations of plans and choices at different levels of EBIT.

Explain why all the DFL for Choice A are the same at $1\mathrm{.}00$ and why all the DFL$\text{'}$s are the same for Plans H&L$.$

Now, under each scenario you have four combinations of financing plans and operating plans, i$.$e$.,$ Choice A$/$Plan H$,$ Choice B$/$Plan H$,$ Choice A$/$Plan L$,$ Choice B$/$Plan L$.$

Q$2$a: Complete the following tables under Scenario A$.$

Q$2$b: Complete the following tables under Scenario B$.$

Q$2$c: Suppose that you are relatively less risk$-$averse manager implying that you are willing to take more risk to get higher expected return.

Which combination of plans should be selected under Scenario A and why?

Q$2$d: Suppose that you are relatively more risk$-$averse manager implying that your decision is more likely to be based on the CV$.$

Which combination of plans should be selected under Scenario A and why?

Q$2$e: Suppose that you are relatively less risk$-$averse manager implying that you are willing to take more risk to get higher expected return.

Which combination of plans should be selected under Scenario B and why?

Q$2$f: Suppose that you are relatively more risk$-$averse manager implying that your decision is more likely to be based on the CV$.$

Which combination of plans should NOT be selected under Scenario B and why?

Q$2$g: Compute the DFL of four combinations of plans and choices at different levels of EBIT. Explain why all the DFL for Choice A are the same at $1\mathrm{.}00$ and why all the DFL$\text{'}$s are the same for Plans H&L$.$