ABC Company has a new management team that has developed an operating plan to improve upon last year's ROE. The new plan would place the debt/TA ratio at 55 percent which will result in interest charges of $7,000 per year. EBIT is projected to be $25,000 on sales of $270,000, and it expects to have a total assets turnover ratio of 3.0. The average tax rate will be 40 percent. What does Roland expect return on equity to be following the changes?

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