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11. COGS is calculated using the formula:
COGS = Revenue – Gross profit = $5000 - $1500 = $3500
12. Interest expense is calculated using the formula:
Interest = Cost of debt * Book value of debt
Firm A has nil debt, so interest expense is 0.
Firm B has debt of $500, so interest = 8% * $500 = $40...
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