Bass Corporation is considering whether to pursue an aggressive or conservative current asset policy, as well as an aggressive or conservative financing policy. The following information is available: - Annual sales are $50,000,000. - Fixed assets are $30,000,000. - The debt ratio is 40 percent. - EBIT is $3,000,000. - Tax rate is 25 percent. - With an aggressive policy, current assets will be 20 percent of sales; with a conservative policy, current assets will be 60 percent of sales. - With an aggressive financing policy, short-term debt will be 60 percent of the total debt; with a conservative financing policy, short-term debt will be 20 percent of the total debt. - Interest rate for short-term debt is 6 percent. Interest rate for long-term debt is 11 percent. Required: a) Determine the return on equity for the aggressive approach and for the conservative approach. b) Discuss which approach you would choose