16 A corporation is deciding whether to pursue a restricted or relaxed working capital investment policy. Restricted (tight -- Lean & Mean) policy: CURRENTASSETS are 15% of Sales Relaxed (conservative - Eat Cat) policy: CURRENT ASSETS are 32% of Sales The firm's annual sales are expected to total $4,500,000 Fixed assets are $2,400,000 Debt ratio = 35.0000% Equity ratio = 65.0000% EBIT is $325,000 Interest rate on the firm's debt is 12.0000% Tax rate is 28.0000% CREATE the BALANCE SHEET and INCOME STATEMENT CALCULATE the ROE for the restricted and relaxed policies. What is the DIFFERENCE in the projected ROEs under the restricted and relaxed policies? 2.3323% 2.7749% 1.5160% 4.7227% 7.5500%