Question: 1. Leverage involves using fixed costs to magnify the potential return to a firm. Explain the hedging (maturity matching) approach to financing. 2. Illustrate the

1. Leverage involves using fixed costs to magnify the potential return to a firm. Explain the hedging (maturity matching) approach to financing.

2. Illustrate the relationship between profitability, liquidity, and risk in the management of working capital.

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