garrett camp and travis Are the founders of Uber. Assume that the company currently has $250,000 in equity in it considering an extension to the increase demand. The $100,000 expansion with younger $16,000 in additional income before interest expense. Assume that the company curly earn $40,000 annual income before interest expense of $10,000, Building a return of equity at 12% ($30,000/$250,000). To fund the expansion, the company is considering issuing a 10 year $100,000 note with annual interest payments (The principal due at the end of 10 years).

required

1. Using return on equity as a decision criterion, shows computation to support or reject extension is interest on the note is a. 10% b.15% c.16% d.17% e. 20%

2. What general rule do the result is part one illustrate?

cases. RAW Steps: 1. Click Reply, and in a one-page paper--in paragraph form-answer the following questions (15 points total) Have this done by Thursday at 11:59 p.m. so others have time to reply to it 1. Garrett Camp and Travis Kalanick are the founders of Uber. Assume that the company currently has $250,000 in equity and is considering an expansion to meet increased demand. The $100.000 expansion would yield $16,000 in additional income before interest expense. Assume that the company currently earns $40,000 annual income before interest expense of $10,000, yielding a return of equity of 12% ($30,000/$250,000). To fund the expansion, the company is considering issuing a 10-year, $100.000 note with annual interest payments (the principal due at the end of 10 years). Required: 1. Using return of equity as the decision criterion show computations to support or reject the expansion if interest on the note is (a) 10% (b) 15%, (c) 16%. (d) 17%, (el 20%? 2. What general rule do the results in part 1 illustrates 2. Click Post Reply when done