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The Quarterly Cash Flows from Operations for Two Computer Companies

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Essay

The quarterly cash flows from operations for two computer companies are as follows:
The quarterly cash flows from operations for two computer companies are as follows:     Required: 1)Explain why Firm B has more credit risk than Firm A. 2)Suppose that Firm B's cash flow was $200 million higher each quarter.Explain why Firm B might still be viewed as having higher credit risk than Firm A.
Required:
1)Explain why Firm B has more credit risk than Firm A.
2)Suppose that Firm B's cash flow was $200 million higher each quarter.Explain why Firm B might still be viewed as having higher credit risk than Firm A.

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Definitions:

Complement

In probability theory, the complement of an event is the set of all outcomes in the sample space that are not included in the event itself.

Independent

In statistical analysis, this term describes variables that are not affected by changes in other variables.

Equivalent

A term used to indicate two items, systems, or quantities that are the same or have identical value or function.

Conditional Probability

The likelihood of an event occurring given that another event has already occurred.

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