The calgary company is thinking of modifying its working capital

The Calgary Company is thinking of modifying its working capital assets policy. Fixed assets are $600,000, sales are projected at $3 million, the EBIT/sales ratio is projected at 15 percent, the interest rate is 10 percent on all debt, the federal-plus-state tax rate is 40 percent, and Calgary plans to maintain a 50 percent debt-to-assets ratio. Three alternative current asset policies are under consideration; 40, 50 and 60 percent of projected sales. What is the expected return on equity under each alternative?

Don't use plagiarized sources. Get Your Custom Essay on
Need an answer from similar question? You have just landed to the most confidential, trustful essay writing service to order the paper from.
Just from $11/Page
Order Now