Assigned Problem 1 Poker Company has identified two methods for producing playing cards. One method involves using a machine having a fixed cost of $10,000 and variable costs of $1.00 per deck of cards The other method would use a less expensive machine (with fixed cost $5,000), but it would require greater variable costs ($1.50 per deck of cards). If the seling price per deck of cards will be the same under each method, at what level of output will the two methods produce the same net operating income (EBIT)? Assigned Problem 2 Firms HD and LD are identical except for their level of debt and the interest rates they pay on debt--HD has more debt and pays a higher interest rate on that debt. Based on the data given below, what is the difference between the two firms' ROEs? Applicable to Both Firms Assets EBIT Tax rate Firm HD's Data Debt ratico Interest rate Firm LD's Data $200 $40 35% 50% Debt ratio 30% 12% interest rate 10%