acob Cornwall has a business in which hes invested $290000 of his own money, which is the firms only capital. (There are no other equity investors and no debt.) In a recent year, the firm had a net income of $20000 for a return on equity of 6.90% ($20000/$290000). What will the firms return on equity be next year if net income from business operations remains the same but it borrows $140000 returning the same amount to Jake from the equity account if (Round your answer to two decimal places.):

a. The after-tax interest rate is 6%.	%
b. The after-tax interest rate is 10%.	%