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Your startup LLC (which pays no income tax) has $500K available for a one-year marketing campaign of your Super Software product in Market X. You

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Your startup LLC (which pays no income tax) has $500K available for a one-year marketing campaign of your Super Software product in Market X. You note that Market Y would also be a great place for a marketing campaign. The cost of a campaign in Y would be $300K. You present the firm's CFO with two options. A) Run a campaign in just Market X. B) Run a campaign in both X and Y. funding the Y campaign with a long term loan from Bank of China with a 10% annual interest rate. Here is more relevant financial information: Notes for Plan B Loan amount for B) Debt int. rate is: 300 K 10.0% Projected Annual Income Statements for marketing campaigns (SK) Estimated Sales Generated from Campaign(s) Direct Campaign Cost Required Interest Cost @10% Campaign Net Income Plan A 750.00 -500.00 0.00 250.00 Plan B 1200.00 -800.00 Campaign Profit Margin Use this info to answer the following questions. Question 19 Vhch Plan is Riskier and Why? Choose one plan and one reason. Question 19 1 Which Plan is Riskier and Why? Choose one plan and one reason. It is more highly levered There is less equity put into this project B It is less levered Marketplace interest rates may move materially in a year It has a lower Z score

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