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AAA Inc. is evaluating a project that will require $800,000 in assets. The project is financed with equity only and is expected to generate earnings

AAA Inc. is evaluating a project that will require $800,000 in assets. The project is financed with equity only and is expected to generate earnings before interest and taxes of $120,000. The firm has a tax rate of 15%. What is the ROE (return on equity) for this project?

a.

15.00%
b.

2.45%
c.

12.75%
d.

16.85%

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