corporate finance

3. Fybert Toy, Inc. is really making it big in Texas. Their sales predictions for next year are $9 million, and fixed assets will grow to $1,890,000. Projected earnings before interest and taxes are 22% of sales with a 34% tax rate. Fybert's policies in the past have been carefully monitored. They have maintained an interest rate of 11% on all short- and long-term loans, which totals 32% of all assets. Fybert is now struggling over how their investment in current assets is affecting the return on common shareholders' equity. a. What is the company's return on equity based upon a working capital strategy calling for a current asset-tosales ratio of 35% ? b. Assuming the same information, answer (a) based upon a current-asset-to-sales ratio of 50%