Question

Smiley Corp. and Tsang Inc. were organized in 2005. Both companies operate in the same line of business. The statements of financial position of the two companies at December 31, 2014, are as follows:
Required:
1. Eric Frechette wants to invest in one of these two companies by purchasing all of its shares. As a financial adviser to Mr. Frechette, which company would you select as an investment? Provide justification for your selection.
2. Each company applied to Development Bank for a loan of $ 20,000, payable in four months. As a bank loan officer, would you lend each company the requested amount? Explain.


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  • CreatedAugust 04, 2015
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