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20 2. Please complete the table below given the following assumptions: 21 The firm has $100,000 worth of assets and and a gross margin of

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20 2. Please complete the table below given the following assumptions: 21 The firm has $100,000 worth of assets and and a gross margin of 10%. 22 No taxes or depreciation. 23 The interest rate is 5% for the unleveraged firm increasing 0.75% for each 10% D/A increase. 24 25 Assets $ 100,000 26 Gross Profit $ 10,000 27 28 29 Interest Total Equity Rate Total Debt Interest Net Profit ROA ROE 30 Debt/Assets Ratio 31 32 33 34 35 36 37 38 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 39 40 41 42

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