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Changing Levels of Current LiabilitiesFirm B has the following levels of assets, liabilities, andequity:Assets Liabilities and EquityCurrent Assets $20,000 Current Liabilities $10,000Fixed Assets 42,000 Long-term Debt 37,000Total 62,000 Equity 15,000Total 62,000The firm’s current liabilities cost approximately 4% annually tomaintain, and the average annual cost of its long-term funds is15%.Calculate the firm’s initial values of 1) the ratio of currentliabilities to total assets, 2) the annual cost of financing, and3) net working capital.If the firm shifts $5,000 of current liabilities to long-termfunds, find the value of 1) the ratio of current liabilities tototal assets, 2) the annual cost of financing, and 3) net workingcapital.Returning to the original balance sheet, assume the firm shifts$5,000 of long-term funds to current liabilities, find the value of1) the ratio of current liabilities to total assets, and 2) theannual cost of financing, and 3) net working capital.Summarize your findings by describing the relationship betweenrisk and return and the three different liability structures foundin a, b, and c.