Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 4. understanding business and financial risks the

4. Understanding business and financial risks The total risk in a firm is determined by...

60.1K

Verified Solution

Question

Accounting

image
image
4. Understanding business and financial risks The total risk in a firm is determined by evaluating the firm's business risk and financial risk. As an analyst, Olivia is comparing two nearly identical manufacturing firms: Lost Pigeon Manufacturing Company and Golden Fish Production ine, It is your job to evaluate the relative business and finandal risks of Lost Plgeon and Golden fish. The two firms have the same level of total assets and expected net operating profit after taxes (NOPAT), but they differ in two critical characteristics: total debt and the standard deviation of the expected NOPAT. The following table outlines some of Lost Pigeon's and Golden Fish's major attributes: Use the given financial data to indicate which firm has the higher degree of each type of risk. Which firm has more business risk? Lost Pigeon Golden Fish Which firm has more financial risk? Lost Pigeon Golden Fish

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students