A corporation is considering several working capital policies.

Annual sales are $4,475,000

Fixed assets are $1,960,000

Target capital structure calls for 68.0000% debt

Earning Before Interest & Taxes (EBIT) is 14.5000% of Sales

Interest rate on debt is 11%

Federal plus State Tax rate is 26%

Restricted policy: current assets 48.0000% of sales

Moderate policy: current assets 60.0000% of sales

Relaxed policy: current assets 72.0000% of sales

CALCULATE (Show ALL work for ALL calculations with 6 decimal points)

- RETURN on EQUITY (ROE) - Restricted Policy - RETURN on EQUITY (ROE) - Moderate Policy - RETURN on EQUITY (ROE) - Relaxed Policy - ROE Difference between HIGH and LOW-Risk Policies