Assignment No. 01 Soft Airline is a small cargo carrier that flies among the States of North Africa. The company is competing with large and loss - making public airlines and profitable western airlines. Shareholders are quite worried about the survival, debt burden and financial risk. Accordingly the company has to go for profitable strategic option with less adverse effects on liabilities and more contribution of equity finance. As a consultant, you have been asked by the BOD to find out the best option. A. Data for the year 2000 40,000,000 25,000,000 zero Total assets = Fixed assets = Intangible assets = Current assets = Total Liabilities = Current Liabilities = Depreciation Rate = 27,000,000 0.40 LTL 10% (SLM) Options derived by the policy analyst are as follows: Option No. 01 @FA = 12%; NWC = 14% Dep rate = 12% for new fixed assets DPR = 40% ROTA, 13% SI = 3m Option No. 02 @FA = 6% @NWC = 15% Dep rate = 10%; DPR = Zero SI = 6M ; ROTA = 10%