This material may consist of step-by-step explanations on how to solve a problem or examples of proper writing, including the use of citations, references, bibliographies, and formatting. This material is made available for the sole purpose of studying and learning - misuse is strictly forbidden.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...